Lufthansa braces for strike
Deutsche Lufthansa CEO Carsten Spohr is willing to brave a fresh round of strikes to push through cost-cutting plans.
|||Frankfort - Deutsche Lufthansa CEO Carsten Spohr says he’s willing to brave a fresh round of strikes to push through cost-cutting plans after pilots said the German carrier had rejected their latest contract proposals.
“Our pilots say: ‘low-cost? Fine, but with high-cost pay,’’ Spohr said Wednesday in Vienna. ‘‘That won’t work. I hope there will be no further strikes, but if that’s what we have to endure to make the company fit for the future, we will.”
The latest pilot plan would deliver 500 million euros ($564 million) in savings, according to the Vereinigung Cockpit labor group, while seeking to include all pilots from discount arm Eurowings in Lufthansa’s own collective bargaining agreement. Strikes could happen across the group “with immediate effect” as a result of the management stance, the union said.
Lufthansa said separately that it hasn’t rejected the union proposals outright and that the position should serve as a basis for future negotiations. Spohr is seeking to pare costs at short-haul operations by switching flights to Eurowings, which he says could become Europe’s number 3 low-cost carrier, making it vital that the unit sticks with separate contracts.
“We still find it difficult to see how both parties can meet in the middle since control of Eurowings is a binary outcome,” Deutsche Bank analysts including Anand Date said in a note to clients. “As such, a resolution may still be some time away, with risks of strike action in the interim.”
Lufthansa pilots have staged 12 strikes over the past year, compelling Spohr to twice revise his earnings targets.
The CEO, who described the dispute as the “most severe” in the German carrier’s history at the Austrian briefing, is engaged in parallel talks with cabin crew and ground staff over a range of issues including retirement benefits.
“We’ve had too many strikes already, and they did not bring us any closer to a solution,” Spohr said. “A solution can only be reached through negotiations and discussions.”
BLOOMBERG