Lufthansa’s Pilots Threaten Strike as Ballot Backs Wage Demands

Deutsche Lufthansa AG (LHA) pilots voted to go on strike in a dispute over pay and retirement benefits at Europe’s second-largest airline, complicating a turnaround plan for incoming Chief Executive Officer Carsten Spohr.

The Vereinigung Cockpit said the 5,400 pilots at the company’s main passenger airline backed a walkout that may come at any time, while providing a 48-hour warning and avoiding disruptions during the busy Easter holidays, spokesman Thomas von Sturm said today in Frankfurt, where Lufthansa is based.

Lufthansa, seeking to more than triple operating profit by next year, wants pilots to accept pay raises tied to financial performance for three years, That may limit annual increases from nothing to 6 percent through 2015. It has also revised terms for pensions and early retirement.

“Lufthansa’s management has set itself under so much pressure with their overblown profit goals that they are no longer in a position to carry out sensible tariff negotiations,” von Sturm said. “We’ve been negotiating for two years now and and our patience is exhausted.”

All the measures are aimed at boosting productivity to enhance competitiveness, personnel manager Peter Gerber said. Spohr, who oversees the main airline unit, takes over next month, inheriting a sweeping savings plan initiated by his predecessor Christoph Franz, who is joining Roche Holding AG. (RO)

Pilots want raises that at least cover inflation and have criticized the company for seeking high dividends for investors at the expense of employees. Negotiations were last held in December and the latest round hasn’t been set.

Lufthansa board member Bettina Volkens, who will take over responsibilities for personnel from Peter Gerber in May, in a letter to employees said she sees “good chances” to come to an agreement regarding the tariff negotiations.

Lufthansa pilots last staged a strike in 2010, disrupting large amounts of traffic and forcing a total of 2,825 flights to be canceled. A Frankfurt labor court settlement led to the strike ending after one day.

Pilots cost Lufthansa 1 billion euros ($1.38 billion) a year, helping to push annual operating expenses to 30.8 billion euros in 2013 -- the highest among 40 carriers in the Bloomberg World Airlines Index.

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

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

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