Deutsche Lufthansa AG resumed pay talks with cabin crew after their biggest-ever strike grounded 1,000 flights, wiping out more than 50 per cent of the schedule.
Flight attendants at Europe’s second-biggest airline walked off the job for the third time in a week, with the action extended to 24 hours and all of Lufthansa’s hubs. The Cologne-based carrier usually operates 1,800 flights a day.
The cancellations mark the biggest strike disruption since February 2010, when Lufthansa scrapped 1,200 flights after a pilot walkout. Both sides hardened their positions before the current dispute, with the Unabhaengige Flugbegleiter Organisation union saying resumption of talks required a new offer and Lufthansa, whose stock rose 1.5 per cent today, declining to make one.
“The market is responding to the hard-nosed actions of the board,” said Juergen Pieper, a Frankfurt-based Bankhaus Metzler analyst who recommends buying the stock. “If you estimate it’s 20 million euros ($25 million) per day, then that’s a good investment if it has positive long-term consequences.”
Lufthansa closed at euro 10.13 in Frankfurt and has gained 10 per cent this year, valuing the company at euro 4.58 billion.
The German airline is tangling with cabin crew two years after competitor British Airways endured a walkout by its own flight attendants to force through plans to hire new staff on cheaper contracts as part of a step-change in pay levels.
Air France-KLM Group, Europe’s biggest airline, is locked in its own wrangle with cabin crew, with two of three main unions having rejected the carrier’s most recent proposals.
Frankfurt airport’s Terminal 2, used by Lufthansa, was “very peaceful” today as passengers stayed away, Mike Schweitzer, a spokesman for operator Fraport AG, said at the site, adding that other operators’ flights are running as usual.
Anibal Rego, a 50-year-old court translator stuck at Frankfurt mid-way through a trip from Windhoek, Namibia, to Lisbon, said passenger care there was poor.
“It’s nuts,” he said. “We were told we have a flight at 1 pm, now we’re being told 7 pm. It gets very expensive, paying roaming charges to find out what’s going on.”
Judy Nixon, 72, returning to San Francisco after a group holiday in Russia and slated to fly with Lufthansa via Frankfurt, was routed to Berlin, Zurich and Washington due to the strike. “We really hope the connections work,” she said while awaiting her plane at the German capital’s Tegel airport.
The two sides are at odds over pay increases as Lufthansa implements a euro 1.5-billion savings programme dubbed Score. The airline has already announced plans to scrap as many as 4,500 administrative and catering jobs from a workforce of 120,000.
Talks that had collapsed on August 28 have resumed at an “exploratory” level, according to UFO official Samy Hammad, who was unable to say whether the parties had met in person.
Lufthansa made contact with the union earlier today, spokesman Thomas Jachnow said. The airline added in an email that it has offered to stop employing Berlin crews on temporary contracts as it seeks to encourage the resumption of talks.
A maximum 1,200 flights will be affected by today’s strike, since the rest are operated by partners such as Austrian Airlines, Lufthansa spokesman Andreas Bartels said. The airline had dropped 997 services as of 2:15 pm. Two earlier strikes were for shorter periods and only at specific locations.
German national rail operator Deutsche Bahn AG is adding staff at locations affected by the strike and will deploy every available train, the Berlin-based company said in a statement.
Tickets for Lufthansa flights within Germany are exchangeable for rail tickets, it said.
Air Berlin Plc (AB1), Germany’s second-biggest airline, will operate larger planes than usual on 16 flights within Germany and add six services, spokeswoman Kathrin Zerkel said by phone.
UFO wants a 5 per cent raise on a one-year contract backdated to April 1, and contends that Lufthansa’s most-recent pay proposal amounts to a 1.5 per cent annual increase that would erode wages by euro 1,300 a month after inflation.
Lufthansa said September 5 that its raise totals 3.5 per cent over time and that all flight attendants would get higher pay.
The union also opposes the use of temporary workers, and says it’s seeking guarantees that staff will not be transferred to new low-cost divisions on less lucrative contracts.
“It’s extremely important for the Lufthansa investment case and their long-term structural future to deliver on the Score cost programme, and labour is a big part of that,” said Stephen Furlong, an analyst at Davy Holdings in Dublin with a “neutral” rating on Lufthansa. “At a group level, they’ve indicated that a third of the savings would come from staff costs.”
