Unions extended the strikes throughout the current week until Friday. The deadlocked collective bargaining dispute over occupational pensions for cockpit crews and improved working conditions for cabin staff is thus escalating. Only on Wednesday, protests by crew members outside Lufthansa's Frankfurt headquarters overshadowed the company's centenary celebrations attended by Chancellor Friedrich Merz. UFO used the ceremony to exert public pressure on the employer. UFO collective bargaining expert Harry Jaeger stated the union was appalled and shocked, describing the move as ruthless. "This is open warfare against their own people."
KEROSENE SHOCK
Streichert justified the accelerated measures not only by the "additional burdens from industrial action" but also by increased fuel costs and the global uncertainty caused by the war in Iran. Although Lufthansa has hedged 80 percent of its fuel requirements, avoiding the more than doubled prices for the majority of its needs, the remaining unhedged portion is weighing heavily on the balance sheet. As it stands, this represents an annual increase in kerosene costs of 1.4 billion euros, a Lufthansa spokesperson added. Capacity must also be adjusted to reflect weaker demand. Simultaneously, Streichert issued new austerity mandates for the administration.
Softening demand also prompted Swiss-based Edelweiss, part of the Lufthansa Group, to cancel summer flights to Denver and Seattle and reduce frequencies to Las Vegas. Dutch carrier KLM cut 160 flights, citing fuel costs. Low-cost carrier Easyjet warned of higher first-half losses. On the stock market, airline shares are under increasing pressure; Lufthansa stock lost more than three percent on Thursday.
The development is causing concern for airports. Lufthansa's move illustrates the impact of rising fuel costs and supply risks on aviation capacity, according to the airport association ADV. "Kerosene supply in Europe is under increasing pressure."
REDUNDANCY PLAN AND ALTERNATIVE ROLES
Cityline was originally scheduled to be phased out by the end of this year. Discussions regarding a social redundancy plan for the approximately 500 pilots and 800 flight attendants are now to be held with works council partners. Lufthansa reportedly does not intend to negotiate with UFO, which had demanded a collective redundancy agreement. To finalize a redundancy plan, operations must be formally closed; for now, they are merely suspended, and employees continue to be paid.
"The current crisis forces us to implement this measure sooner," Streichert said. "This is a painful step, particularly with regard to our colleagues at Lufthansa CityLine." The company is seeking continued employment opportunities within the Group. "The goal remains to provide Lufthansa CityLine crews with career perspectives within the Lufthansa Group." Many employees had previously rejected offers to transfer to City Airlines, which was established specifically to operate at lower costs.
Flight personnel at the core Lufthansa brand will also soon face reduced deployment opportunities. By the end of the summer flight schedule in October, four older Airbus A340-600 long-haul aircraft will be phased out, and two Boeing 747-400s will be decommissioned. These four-engine jets consume significant amounts of fuel and were already slated for retirement. In the winter schedule, short- and medium-haul capacity will be reduced by the equivalent of five aircraft. Meanwhile, the lower-cost subsidiary Discover is expected to expand more rapidly with nine new Airbus A350 jets. This is another move by Lufthansa in response to the currently intractable labor disputes with VC and UFO. The company's objective is to drive down comparatively high personnel costs and return the struggling flagship carrier to profitability. Consequently, Lufthansa is rejecting any demands that are not cost-neutral.
(Edited by Ralf Banser)
- by Ilona Wissenbach
