Lufthansa Summer of Strikes: What Happens Next?

- Leadership - Oct 14, 2014

It has been a turbulent summer for Lufthansa, Europe’s largest airline.

As summer of strikes has left thousands of passengers frustrated and millions in revenue lost, and the biting issue remains seemingly unsettled. 

On September 30 alone, 20,000 travellers were impacted by a walkout. 

The chaos is a result of clashes between Lufthansa pilots and their paymasters, with the Vereinigung Cockpit (VC) trade union, representing 5,400 company pilots, pressing the airline to keep a scheme that allows their members to retire at 55 and still receive up to 60 percent of their pay before regular pension payments start.

The company has offered to keep the pension scheme running for pilots who arrived at the company before this year, but new recruits are being subjected to an increased earliest retirement age, a move that VC has deemed unfair.

Subsidary Austrian Airlines appears to be settling a long-standing dispute with pilots and flight attendants, avoiding the need for intervention from the European Court of Justice. The deal is set to reverse the company’s strategy of transferring flight operations to cheaper Tyrolean Airlines.

Lufthansa will continue to face the struggle of satisfying pilot demands and cutting costs in order to compete with cheaper airlines, especially in the long haul sector where operators such as Emirates and Turkish intensify their competition.

Having agreed with cabin crew, catering and ground staff on ways to economise, the company now says it is the pilots’ turn to cooperate.

Cooperation will be needed swiftly, for continued strike action and cancelled flights going into the winter period will no doubt further undermine passenger confidence, many of whom will be looking to book flights for summer holidays in 2015.

It is also a nervous period for shareholders after economists lowered growth forecasts, and further losses in consumer confidence may lead to long term share price damage unless the spat is portrayed as being under control and on genuine track to being solved.

However Lufthansa is not the only airline to be suffering from pilot strike action. Air France recently suffered a two-week walkout, part of a tumultuous summer which is said to have cost the company around half a billion dollars.

This said, it is not all bad news, as Lufthansa has announced its intention to invest €2 billion in its cargo business in a scheme dubbed Lufthansa Cargo 2020. This will involve the development of an improved hub at Frankfurt Airport. 

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