Lufthansa Pledges to Beat Strike as Pilots to Walk Out SaturdayBy
Dispute amounts to a battle for airline’s future, Spohr says
Union says CEO aims to destroy it, extends action to weekend
Deutsche Lufthansa AG Chief Executive Officer Carsten Spohr said Europe’s third-largest airline must hold its nerve and face down striking pilots if it’s to deliver savings needed to survive, as their union gave notice that the conflict will stretch to a fourth straight day.
Taking on the pilots “is not about being tough,” but “about the future of Lufthansa,” Spohr said in an interview in Berlin. If the company caves in to pay demands it has “no chance of survival” he said.
Lufthansa has already canceled almost 1,900 flights across its mainline operation through midnight Thursday, wiping out 40 percent of the timetable including premium trips to Beijing and Los Angeles. Scrapped services will top 2,600 by the end of a third day of action Friday, when walkouts will be limited mainly to short-haul operations, taking the number of passengers impacted to 315,000. Long-haul pilots will then strike again on Saturday.
Harry Hohmeister, who heads Lufthansa’s network airlines, said separately that each day of strikes has so far cost about 10 million euros ($11 million), with Friday’s action set to cost half that, while forward bookings have been dented.
A long-running spat over wages, working conditions and the expansion of Lufthansa’s low-cost Eurowings arm has reached new levels of bitterness after Spohr sought to block what had been planned as a single day of action. When a Frankfurt labor court dismissed the case and an appeal failed, the Vereinigung Cockpit union retaliated by extending the protest by two more days.
Lufthansa, which has had to book 4,000 emergency hotel rooms for stranded passengers and set up 400 camp beds at its Frankfurt hub for people due to catch connecting flights, hit back by reviving a two-year-old claim against the labor group for 60 million euros in damages from an earlier strike. The union said that amounts to an attempt to destroy it.
While Spohr has repeatedly offered to bring in a mediator, Vereinigung Cockpit is unwilling to return to talks without an improved pay proposal. The union is seeking a 20 percent raise for the period spanning 2012 through 2017, or 3.7 percent a year. Lufthansa has offered 2.5 percent, or 0.38 percent annually, through 2018.
“There is no more leeway for even better offers when escalation is what is wanted, as opposed to a solution,” Spohr said. “In the past months we have made all kinds of different and improved offers. The solution can only be arbitration.”
The CEO said he’d have to cull more weaker routes -- something Lufthansa is already doing -- if he accepted the union proposal and costs rose. The company has also faced opposition from cabin crew at Eurowings, who walked out Tuesday at a cost of 64 flights.
“We want to be able to grow again, within the group, and also at the core Lufthansa brand,” he said. “That’s what we aim for. We want to stop shrinking and start growing again. In order to be able to do that, we need competitive structures.”
Stefan Schulte, CEO at Fraport AG, which runs Lufthansa’s Frankfurt hub, also spoke in Berlin and urged Vereinigung Cockpit to embrace Spohr’s offer of outside mediation.
“I am calling on all parties to come to a solution as quickly as possible,” he said. “That is in the interests of all our passengers. I am appealing to the union to take on Carsten Spohr’s call for an arbitration.” Even before this week Fraport had forecast passenger numbers would decline this year.
Hohmeister, who spoke Thursday in Frankfurt, said the strike’s negative impact on bookings has so far been limited to next week, and that the future effects will be determined by how long the action continues.
Lufthansa shares closed 1.1 percent lower at 12.64 euros in Frankfurt, taking their decline this year to 13 percent. Fraport was barely changed.