Aug. 31 (Bloomberg) -- Deutsche Lufthansa AG flight attendants resumed work after an eight-hour pay strike forced Europe’s second-largest airline to cancel most services at its main Frankfurt airport hub.
Cabin crew members reported for duty after the walkout called by the Unabhaengige Flugbegleiter Organisation union ended at 1 p.m., said Thomas Jachnow, a Lufthansa spokesman. The airline canceled at least 207 flights, primarily within Europe as well as services to and from some U.S. cities, Tel Aviv and Chennai, India, according to Lufthansa’s website.
The dispute centers on the pace of pay raises and whether separate wage scales apply to some groups of workers as Lufthansa implements a 1.5 billion-euro ($1.9 billion) savings program dubbed Score. The Cologne, Germany-based company has already announced plans to scrap as many as 4,500 jobs in administration and catering to reduce its 120,000-employee global workforce.
“The fear is that this conflict goes on indefinitely because the negotiation positions seem very far apart,” Jochen Rothenbacher, an analyst at Equinet Bank AG, said by phone. “Lufthansa has to cut costs, that is clear because of the market conditions, and the union is of course opposed to it.”
Lines at check-in counters stretched beyond 100 meters at Frankfurt as passengers tried to rebook seats. A canceled 9:05 a.m. flight to Sarajevo, Bosnia-Herzegovina, stranded that country’s national basketball team as it was flying home from a game in Latvia to get ready for another match against the Netherlands tomorrow.
“We have no idea how we’re going to get back,” said 22-year-old Nemanja Metrovic, who plays shooting guard and was traveling with the 20 other members of the Bosnian squad. “It gives us less time to prepare. Just find us a plane.”
Lufthansa had 360 flights on its normal timetable for today at Frankfurt, said Klaus Gorny, a Lufthansa spokesman. The airline has been “trying as hard as possible to carry out the existing flight schedule and to book our passengers onto other flights,” he said.
Additional cancellations are likely today as the strike left some planes in the wrong location to carry out flights, spokesman Jachnow said.
Almost 90 percent of UFO members who were scheduled to fly took part in the strike, Alexander Behrens, a spokesman for the union, said by phone. He declined to specify the number of participants.
“We are all delighted with how it went and are happy that everyone is defending this group of employees together,” Behrens said. A new strike could be called as early as tomorrow, he said.
Contract talks between UFO and Lufthansa collapsed on Aug. 28. The union has outlined plans for short-term strikes initially, with unlimited walkouts possible later. UFO has said it will give six hours notice of any stoppage.
A full-day halt at Frankfurt would cost Lufthansa at least 6 million euros, Peter Oppitzhauser, a Zurich-based Credit Agricole analyst, said today by phone. Extending the walkout across Germany would set Lufthansa back 12 million euros a day, equating to 2 percent of full-year operating profit estimates, he said.
UFO said late yesterday that it’s seeking a 5 percent raise on a one-year contract backdated to April 1, and reiterated a contention that Lufthansa’s most recent pay proposal amounts to a 1.5 percent annual increase that would erode wages by 1,300 euros a month after inflation. Lufthansa said on Aug. 28 that its raise totals 3.5 percent over time, and all flight attendants would get higher pay.
The union also opposes Lufthansa’s demand that flight attendants assigned to its expanding Berlin operations work 9 percent more hours than employees elsewhere for the same wages, and has objected to its use of temporary workers there. In addition, the parties were unable to agree on whether to protect employees after 2013 from being transferred to low-cost divisions under cheaper pay contracts, according to UFO.
Lufthansa rose as much as 1.4 percent to 9.90 euros and was trading up 1 percent at 2:54 p.m. in Frankfurt.
Frankfurt was Europe’s third-busiest airport in the 12 months through May, trailing only London and Paris, according to trade group Airports Council International. Among carriers in the region, Lufthansa ranks second to Paris-based Air France-KLM Group in terms of traffic, or the number of passengers multiplied by the distance flown.
Deutsche Bahn AG, Germany’s state-owned railway, said today in a statement that it will operate every available train and put extra staff on duty to cope with the anticipated higher numbers of passengers caused by the Lufthansa strike.
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