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Lufthansa to Stand Firm on Costs as Strike Threat Hurts Bookings

Published on Nov 4 2015 3:49 PM in General Industry tagged: airline / Deutsche Lufthansa

Lufthansa to Stand Firm on Costs as Strike Threat Hurts Bookings

Deutsche Lufthansa said it will resist increasing spending on employees even as the German airline’s flight attendants prepare for their biggest-ever walkout in a retirement dispute and a ground-handling and cargo-division union start contract talks.

The airline, undeterred by a slowdown in bookings following the UFO union’s strike threat on 2 November, can’t accept the labor group’s demands, Bettina Volkens, Lufthansa’s head of human resources, said at a press briefing Wednesday in Frankfurt. UFO’s terms would result in as much as 25 per cent higher pension-benefit spending per worker, Volkens said. The airline will present “alternative scenarios and options” later Wednesday that it hopes will result in further negotiations, she said.

“We must make the company fit for the future and we cannot accept any further cost increases,” Volkens said.

UFO has a 5 pm Thursday deadline for the carrier to improve its current offer or flight attendants will halt work from 6 November through 13 November. The Ver.di union, representing check-in, technical-services and air-freight employees as well as cabin crew members who aren’t in UFO, plans separately to start to start negotiating about pensions with Lufthansa on Thursday in a seventh round of wage talks.

The dispute with flight attendants stems from Lufthansa’s efforts to hold back spending to sustain earnings while competing with European discount airlines and full-service rivals from the Middle East. It mirrors a conflict at larger competitor Air France-KLM Group, as well as a spat with Lufthansa’s pilots, who staged a series of strikes until a court stopped the walkouts as an illegal protest against corporate plans to expand a low-cost unit.

Lufthansa said that, while UFO agreed to switch the corporate pension system to a defined-contribution program from defined benefits, the union still wants the absolute level of payments at least to be maintained. In its latest proposal in September, the company called for employees to work for more years to reach that level.

News by Bloomberg, edited by Hospitality Ireland

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