It News: Lufthansa Hit by Strikes

Lufthansa Hit by Strikes

By NICKY REDL

Lufthansa cancels flights after strike at Frankfurt Airport

August 31, 2012

FRANKFURT—Thousands of passengers are stranded at Frankfurt airport Friday after the union representing Deutsche Lufthansa AG LHA.XE +1.08% cabin crew called out its members on a half-day strike over pay and conditions in what could be a long standoff between staff and the German carrier, Europe's largest airline by passenger numbers.

The impact of the strike has spread beyond Germany. Fraport AG, FRA.XE +0.48% the operator of Frankfurt airport, warned that aircraft on flights from Europe not already in the air won't be permitted to land due to the number of Lufthansa planes stuck on the tarmac because of the strike.

Germany's UFO labor union, which Thursday called for an eight-hour strike starting early Friday after negotiations with Lufthansa ended inconclusively last week, expects 80% of cabin crew to take part in the walk out, said union chief Nicoley Baublies.

Around 9,000 passengers are already affected, Mr. Baublies said. The UFO has said it plans to call its members out again having declined requests by Lufthansa to return to the negotiating table.

Lufthansa has been unable to contain the impact of the strike to domestic and regional flights as it originally hoped, acknowledging that some of its long-haul flights, the airline's most lucrative business, have been affected.

So far, around 190 flights have been canceled Friday throughout the day and one flight Saturday. Lufthansa had originally scheduled 700 flights for Friday, of which 360 were planned within the eight hour strike period.

Crédit Agricole Cheuvreux analyst Peter Oppitzhauser said Lufthansa's investors and passengers should steel themselves for a long dispute.

"We'll probably see localized strikes in the first two weeks, and after that the strikes are going to become massive [in the absence of a new round of negotiations]," Mr. Oppitzhauser said.

The financial impact of Friday's strike alone could be between €2 million ($2.5 million) and €3 million.

But the cost-cutting program that is at the heart of the labor dispute is essential even though the frustration of cabin crew over low pay increase in recent years is understandable, Mr. Oppitzhauser said.

Lufthansa wants to make around €1.5 billion in savings over the next three years, partly by eliminating 3,500 administrative jobs, to combat the pressure from high fuel prices and worsening economic prospects in Europe which could other wise jeopardize plans to renew its aircraft fleet with more efficient aircraft and keeping growing. The airline has around €17 billion worth of new jets on order.

In April, UFO demanded a 5% wage increase for Lufthansa flight attendants, a profit-related bonus worth up to a month's pay and a guarantee that the airline wouldn't outsource jobs or employ temporary cabin crew workers. Lufthansa has offered a 3.5% wage increase and a moratorium on hiring temporary staff.

At Frankfurt airport Friday, queues a hundred meters long snaked their way toward ticket counters and help desks, filled with increasingly disgruntled passengers though some have sympathy with the strikers.

"I can understand the striking crew, but for us it's not so great of course, as we've planned a trip through the U.S.," Niko Bechtle from Frankfurt.

Others were less understanding. "When you pay so much money for a ticket, you should be able to expect decent service," said one traveler just arrived from Mumbai in India.

Others took to social media networks to vent their frustration and figure out how to cope with disruptions to their travel plans.

"Lufthansa strike canceled connection to Pilsen. Two trains and nine hours later I should arrive," one passenger complained via twitter.

"Land in Frankfurt to find out Lufthansa employees are on strike! Don't know if any flights will be flying out today," another one tweeted.

Lufthansa has encouraged passengers, like those on flights to Paris, to try traveling by train instead. "We try to bring passengers as fast as possible to their final destination. Sometimes train is the best solution," Lufthansa responded to one customer query via twitter.