Lufthansa’s Germanwings in Crunch Talks Before Potential Strike

Deutsche Lufthansa AG (LHA)’s Germanwings low-cost subsidiary is making a last-ditch attempt at avoiding a strike next week by cabin crew, just days after formally launching the revamped service to help cut expenses.

The UFO union is demanding 5 percent higher pay for about 700 cabin attendants, a cutback on temporary contracts, and the possibility for workers to switch to the parent company. The union has scheduled a press conference for tomorrow and has said strikes are possible as early as July 8 should talks fail.

“We’ve put an improved offer on the table yesterday,” Heinz Joachim Schoettes, a spokesman for Germanwings, said, declining to provide details.

A strike would undermine Lufthansa’s efforts to lower costs on European short-haul routes, where the former German flag carrier has lost as much as 300 million euros ($386 million) annually in past years. Germanwings operates at as much as 30 percent lower cost than Lufthansa, with the parent only retaining services from its main hubs in Frankfurt and Munich.

UFO representatives didn’t immediately return voice messages seeking comment. Disputes with the unions have already contributed to strikes that have disrupted Lufthansa operations this year, as Chief Executive Officer Christoph Franz seeks to push through a savings plan and increase operating profit.

The scope of industrial action affecting Lufthansa through the end of May already matched that for the whole of 2012 when considering strike days on which at least 20 flights were canceled.

To contact the reporter on this story: Richard Weiss in Frankfurt at rweiss5@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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