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Deutsche Lufthansa AG cancelled thousands of flights at the start of a three-day strike by pilots that's set to cause the worst disruption in the airline's history.
Some 3,315 services were suspended through April 4, with about 500 flights to be maintained, according Lufthansa, which has told customers to rebook or switch to rail travel. The Frankfurt-based company is negotiating with about 5,400 pilots in the dispute over retirement benefits.
Europe's second-largest carrier has endured waves of labour unrest in recent years among pilots, ground staff and cabin crew. That's complicated the task facing incoming CEO Carsten Spohr, himself a reserve pilot, in delivering a savings program, with the pilot action alone costing Lufthansa tens of millions of euros in damages.
A Lufthansa pilot was previously able to retire from age 55, with the company paying so-called transitional benefits amounting to as much as 60 per cent of the last salary until the legal retirement age of 63. Lufthansa cancelled the contract at the end of last year after some pilots demanded the right to fly longer, and the labour union said the company may now unwind related provisions amounting to more than euro 1 billion.
Extra benefits
While the strike solely goes against scrapping of the transitional benefits, the pilots, who can earn as much as euro 260,000 a year, are also seeking about 10 per cent higher pay after unsuccessfully negotiating an increase for more than two years. Lufthansa said it offered 5.2 per cent more plus a one-time payment, and also withdrew a demand to tie pay rises to its financial performance for three years.
The walkout affects Lufthansa's main passenger airline, its Germanwings low-cost unit and its cargo operations. The regional arms as well as its Swiss and Austrian units are not affected and will help move as many passengers as possible.
The strike may reduce the carrier's operating profit by a "medium to high double digit million euro amount," Jens Bischof, the board member responsible for sales at the passenger airline, said on Tuesday.
The three-day pilot strike follows a week after Lufthansa services were disrupted by airport workers walking out, which grounded one in three flights on March 27. On February 21, Fraport AG, the operator of Lufthansa's main Frankfurt hub, closed access for outbound passengers after strikes of security staff congested safety checkpoints.
Lufthansa and Fraport saw traffic disrupted by a series of strikes at airports from Hamburg to Dusseldorf for months last year as a German union pushed for higher wages for security staff at those locations, and was hit by several strikes by air traffic controllers in various countries in January.
Lufthansa also saw its cabin crew walk out in September 2012.
