The World from Berlin 'A Question of Lufthansa's Very Future'

Flight crew at Lufthansa vowed to strike this week over the collapse of wage talks as the company struggles to regain profitability on its European routes. Germany's flag carrier airline has little choice but to push through massive cost cuts, say commentators, and its employees must be willing to contribute their share.

Striking workers with the UFO flight attendant union at Germany's Frankfurt Airport on Wednesday

Striking workers with the UFO flight attendant union at Germany's Frankfurt Airport on Wednesday

The end of the busy summer travel period is approaching in Germany this week -- and with it comes the threat of another strike by cabin crew at the country's flag carrier airline, Lufthansa.

Following a collapse in talks between the company and the union representing most of its cabin crew, Lufthansa's flight attendants threatened on Wednesday to launch a strike that could cause major disruptions for air travel in Germany and Europe.

Nicoley Baublies head of the union UFO, which represents the flight crew members, told German news agency DPA that strikes on specific flights could begin as early as Thursday. He added that an all-out strike is not currently in the cards and that several hours notice would be given. "It might not happen for a couple more days, or it might begin tomorrow (Thursday)," he said.

Both company executives and the union are pointing fingers and accusing each other of an unwillingness to compromise. UFO is demanding a 5 percent wage increase but Lufthansa has so far only been willing to offer 3.5 percent. The union is also calling for better entry-level wages as well as significant profit-sharing.

Massive Disruptions

Although the current dispute is limited to better pay, the union is also deeply concerned by Lufthansa plans to revamp much of its German and European operations later this year into a newly branded low-cost carrier aimed at competing better with budget airlines whose success, along with that of rising Middle East carriers, in recent years has contributed significantly to the company's decline. Union representatives want to prevent the company from hiring new flight crew for lesser pay and worse conditions.

Formed in 2002, UFO is one of two unions representing cabin crew at the airline and is given equal recognition by Lufthansa alongside Ver.di, a large national service union that represents many employees at the company. UFO has proved highly popular with employees since its creation a decade ago and an estimated two-thirds of Lufthansa's flight attendants are members. But UFO is also one of a handful of niche unions, like the pilots' association Cockpit and the train drivers union GDL, that have created massive disruptions for companies in recent years.

Lufthansa has lost millions during the past year and the company is looking for ways to save. Company officials complain of high personnel costs, claiming that total spending at the airline is 22 percent higher than at the competition. Earlier this year, the company announced cost-cutting measures that will see the elimination of 3,500 jobs and a reduction in new investments.

Lufthansa is also pushing for flight attendants to increase the number of flights they complete each month, slower wage increases and a reduction in the number of overtime hours paid. It also wants to pay new employees less.

The national airline is the subject of many editorials in German newspapers on Wednesday, with most arguing that Lufthansa has little choice but to significantly reduce costs -- including those associated with its flight attendants.

The Financial Times Deutschland writes:

"One thing should be clear to the flight attendants: They also need to contribute their share to the company's restructuring program. Despite record revenues, Lufthansa's profits have collapsed, with the company posting a net loss during the first half of the year. The company's direct flights within Europe, in particular, run substantial losses. Continuing to do things as they have been done -- on the part of the shareholders or employees -- would be irresponsible. The Lufthansa cabin crews are fighting over the wrong issue if they are trying to block necessary restructuring within the company. Instead they should contribute to the success of restructuring and push, for example, for a greater share in Lufthansa's future success."

The center-left Süddeutsche Zeitung writes:

"Lufthansa is experiencing a dilemma: The company is forced to compete with many new low-cost airlines that are causing prices on short-haul flights to sink. The result is clear: Lufthansa has high losses in Europe. The airline is too expensive -- not only, but also because of personnel costs. The company underestimated its smaller competitors and delayed for too long in countering them. The company founded its own low-cost carrier, Germanwings, but (unions) prevented it from freely developing the company. Now Lufthansa is planning to launch a subsidiary that will fly more efficiently in Europe with cheaper staff."

"On the one hand, it is understandable that the flight attendants want to defend themselves -- at the end of the day, this is about their salaries and working conditions. But they also face a dilemma: namely that Lufthansa may wind up outsourcing their jobs if they prove to be too inflexible. It would be very difficult for them to prevent that. The lesser of the two evils would surely be reaching a compromise that would allow the jobs to remain within the company."

The business daily Handelsblatt writes:

"It may sound like a paradox, especially for the travelers who will be forced to suffer in the coming days, but the decision by Lufthansa executives to remain firm in the wage dispute with flight attendants and to not shy away from a strike is the correct one. There is more at the center of this wage dispute than just the future of the company's stewards and stewardesses: It is a question of Lufthansa's future."

"For far too long, the necessary reforms to wage structures were delayed and the controversial issue was avoided. But there is no other option -- the pressure from competitors has simply gotten too big. In Europe, low-cost carriers like Easyjet and Ryanair are making life difficult for Lufthansa. It also faces pressure on international flights from Gulf region airlines like Emirates and even more so from Turkish Airlines."

The center-right Frankfurter Allgemeine Zeitung writes:

"It is rare that a union describes the announcement of a strike as 'tragic', but after months of wrangling between flight attendants and Lufthansa, the term applies. … It had been clear to the union that employees must also do their part in terms of savings measures in order to make the company's European operations profitable again. At the same time, Lufthansa knew that, at the start of its savings program, it could not alienate its employees too brusquely. But how can Lufthansa expect its employees to come up with ideas for cost-cutting if they are already flying together with temporary workers the airline has brought on board, at a time when they are concerned about their jobs being outsourced and when their own ideas are being ignored? That's not a sophisticated way of negotiating. During the last round of negotiations, Lufthansa should have declared that the talks were a top priority so that they wouldn't have been doomed to failure from the very beginning. … Those who will suffer will be travelers, who will be forced to accept delays and flight cancellations at the end of the vacation season."

The conservative Die Welt writes:

"It's not surprising that flight attendants wanted to go on strike -- wage negotiations had been going on for over a year. Besides, Lufthansa executives have deployed temporary workers on the airline's Berlin routes in recent weeks against UFO's opposition -- a move staff likely saw as a deliberate provocation."

"Now the fight is being carried out on the backs of passengers. But in the face of rising fuel costs and low-cost carriers, Lufthansa CEO Carsten Spohr has little choice than to cut personnel costs. Still, his strategy of threatening to hire temporary workers in order to force existing staff to compromise has failed. He bet too much and he lost. The damage could be considerable, because Lufthansa is more of a service provider than a transportation provider. After all, grumbling workers are likely to put customers off."

-- Daryl Lindsey


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