Lufthansa Strike

A Little Hope, for a Change

  • Why it matters

    Why it matters

    After a series of pilot strikes, Lufthansa’s management has presented the pilots’ union with a new offer. It is still unclear whether the union will accept, even though the company believes it has met the demand the union cited as a condition for arbitration.

  • Facts

    Facts

    • The dispute has been underway for years, and there have already been 15 pilot strikes to date.
    • While the pilots’ union wants a 20-percent pay increase, the latest offer by management calls for an increase of only 4.4 percent.
    • The latest strike forced Lufthansa to cancel 4,450 flights and has cost the airline €10-15 million a day.
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    Audio

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Lufthansa Pilots Continue Strike
Lufthansa pilots have taken to the streets in Frankfurt. Might they finally be pulled back to the negotiating table? Source: Hannelore Foerster/Getty Images

There is new movement in a long deadlocked pay dispute between pilots and management at German airline Lufthansa. Shortly before the end of what was a 15th crippling strike by 5,400 pilots, the management has presented a new offer in the hopes of finally putting aside a mess that has shaken confidence in Europe’s largest airline.

“We are determined to avert further damage to the company and finally offer our passengers, once again, the service they can expect of us,” said Harry Hohmeister, a member of Lufthansa’s executive board.

Lufthansa made its latest offer Wednesday evening to the pilots’ union, Vereinigung Cockpit (VC). Executives believes they have finally met the demands the union had cited as a condition for beginning arbitration in the wage dispute, one which has dragged on for years and cost the airline hundreds of millions in canceled flights and angry passengers the world over.

Whether Cockpit interprets the offer in the same way and is now willing to enter arbitration remains unclear. Union officials said they were reviewing the offer and have asked for more details from management. But there is one good sign for the airline: Strikes for Thursday and Friday have not been called.

Even without a foreseeable new strike, Europe's largest airline is in an extremely difficult situation.

Since November 23, Lufthansa has had to cancel 4,450 flights because of two pilot strikes, both lasting several days. Some 525,000 passengers were stranded or had to be rebooked on other airlines. Lufthansa insiders estimate the loss at €10-15 million ($10.6-15.9 million) a day.

The pilots union has said it intends to provide 24 hours’ notice of any new strikes, and no further strikes have been announced to date.

But even without a foreseeable new strike, Europe’s largest airline is in an extremely difficult situation. As with any wave of strikes, anxious and irritated passengers are increasingly avoiding the airline. Already there has apparently been a noticeable decline in pre-bookings for the coming days and weeks.

That’s been a bitter pill to swallow. Lufthansa management only recently expressed its delight over increasing reservation numbers, especially among business travelers, and had raised its earnings forecast. So far the company has not stated whether it believes the promised adjusted operating result of €1.8 billion ($1.9 billion) will change as a result of the strikes.

Under the management’s latest plan to end the dispute, annual compensation would be increased in two stages for a total increase of 4.4 percent. There is also the offer of a one-time payment, and management has dropped any conditions for entering arbitration. It’s still far from what the pilots want: The union has called for a pay increase of about 20 percent.

“We want to return to the negotiating table as quickly as possible,” said Bettina Volkens, Lufthansa’s chief officer for human resources. “In keeping with VC’s wishes, we can then consecutively negotiate all open wage agreements.”

Compensation is not the only bone of contention between the pilots and management. They are also at odds over a reform of the company pension plan, an even more complicated and sensitive issue than pay.

Furthermore, the pilots’ strike is increasingly creating divisions within the company. On Tuesday, members of the ground staff in Frankfurt demonstrated against the pilots, who had taken to the streets to voice their demands. The works council representing Frankfurt ground staff had called for the counter-demonstration. It views the deadlocked wage conflict as a “destructive dispute” and has called upon Cockpit to “finally” agree to enter arbitration.

“It is really a matter of constructively supporting the necessary corporate restructuring in the interest of all Lufthansa employees and in a way that looks to the future,” reads the works council’s call for a counter-demonstration by ground staff.

There is also growing outside pressure on the parties to finally reach an agreement. Siemens Chief Executive Officer Joe Kaeser told the mass-circulation Bild newspaper: “The strikes are also beginning to harm the German economy and the German brand, which represents reliability and quality.”

In German daily Die Welt, European Union Transport Commissioner Violeta Bulc warned: “The players in the aviation sector are so closely intertwined that the behavior of individual national interest groups can create considerable costs for everyone involved in Europe.”

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This is not the first time that internal disputes have arisen as the best-paid professional group in the airline went on strike. During earlier strikes, portions of the ground staff were sharply critical of their coworkers in the cockpit. There is a rumor at Lufthansa that ground staff at a foreign airport sharply berated the pilots sitting in an aircraft at the gate through the internal communication channel.

So far, at least, other groups eager to maintain their own bargaining power are remaining allied with the pilots. None of the labor unions represented at Lufthansa have backed the Frankfurt works council for ground staff. In fact, both the Ver.di service employees’ union and the U.F.O. flight attendants’ union distanced themselves from the call for the counter-demonstrations. U.F.O. Chairman Nicoley Baublies called it a “bitter and pathetic display.” According to Christine Behle, a member of the union’s federal executive board, Ver.di called on its members not to take part in the demonstration, saying: “We believe the demonstration is wrong.”

Ground staff and members of Ver.di youth organization Ver.di-Jugend working at maintenance organization Lufthansa Technik in Hamburg were outraged and said they were distancing themselves from the call for the counter-demonstration.

“We want to apologize for the impression that was made, partly on behalf of many other ground staff. Regardless of how we feel about a labor dispute involving another group of employees or another union, we think it is an incomprehensible step to call for a counter-demonstration.” Ver.di-Jugend even called upon its members to support the pilots’ union in its demonstration instead of taking part in the counter-demonstration.

For Cockpit, this sends an important message. It shows that not all employees are against the pilots, say union officials. Still, the mutual recriminations highlight the inner strife between and also within individual professional groups.

It’s been a tough dilemma for the airline’s workers. On the one hand, the radical restructuring led by Lufthansa Chief Executive Officer Carsten Spohr demands a great deal from employees, and they are increasingly frustrated as a result. On the other hand, many employees also recognize that the restructuring is necessary.

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The pilots’ demands are also the subject of debate within the unions, which are pointedly declaring their support for the pilots. Despite his clear criticism of the counter-demonstration, U.F.O. Chairman Baublies also has trouble accepting Cockpit’s vehement insistence that old wage agreements have to remain in effect.

“Both sides need to get rid of their dogmas first and then sit down at a table,” he wrote in the Berlin newspaper Der Tagesspiegel.

U.F.O. wage expert Uwe Hien was even more direct in a document he wrote in September 2015. He warned at the time that the hardened positions “which are becoming even more cemented in place, will ultimately threaten jobs throughout Lufthansa.” The pilot strikes are especially detrimental to the cabin crews, because they are being paid less for not working enough flight hours.

 

Jens Koenen covers the airline industry for Handelsblatt out of Frankfurt. To contact the author: koenen@handelsblatt.com

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