Strike grounds Lufthansa flights

150,000 travelers affected as workers demand pay raise

Lufthansa Airplanes are parked during a warning strike of employees of the German airliner Lufthansa in Duesseldorf, Germany, Monday, April 22, 2013.(AP Photo/Frank Augstein)

Lufthansa Airplanes are parked during a warning strike of employees of the German airliner Lufthansa in Duesseldorf, Germany, Monday, April 22, 2013.(AP Photo/Frank Augstein)

Tuesday, April 23, 2013

COLOGNE, Germany - German airline Deutsche Lufthansa AG suspended almost all of its flights for a full day Monday as a strike over pay crippled operations and upset travel plans for 150,000 people.

Lufthansa, Europe’s second-largest airline, grounded 1,755 flights, with only about 20 of 1,650 planned European services and 12 of 70 long haul trips taking off. The Cologne-based company said it won’t be able to quantify the financial effect until it’s clear how many people rebook and cancel or need to be looked after when stranded.

The protest comes as Lufthansa seeks to push through an ambitious efficiency drive to increase margins and fund fleet renewal. Germany is suffering the worst upheaval in air travel since April 2010, when Iceland’s Eyjafjallajokull volcano erupted, grounding 100,000 European flights over six days.

“Motivation to strike seems to be high, allowing the union to flex their muscles,” said Jochen Rothenbacher, an analyst at Equinet in Frankfurt who predicts the walkouts could cost $26 million in operating losses and complicate Lufthansa’s efforts to extract the targeted savings. Still, “investors may see this as a sign Lufthansa will stand its ground in the negotiations despite the pressure,” he said.

The airline is seeking to lower expenses and increase sales to lift operating profit to a record nearly $4 billion by 2015, a plan that includes the elimination of 3,500 jobs.

The Ver.di union, which represents about 33,000 Lufthansa employees including catering, freight and maintenance personnel, is seeking a 5.2 percent wage increase. The union is also pressing for an agreement to exclude firings.

In September last year, a strike by cabin crews caused the airline to cancel morethan 50 percent of daily services, or more than 1,000 flights. On Feb. 22, 2010, a strike by pilots wiped out two-thirds of all connections.

Lufthansa’s operations were also hampered by a walkout among apron controllers in Frankfurt in February last year and by a security-guard strike at various German airports this year.

“The transportation industry has morphed into a strike industry, highly damaging our image,” Stefan Lauer, Lufthansa’s board member for personnel, said on a German television program. “We have to endure a different strike every three months these days, not only by our own unions but also from outside.”

Monday’s strike is the second in the current dispute. Ver.di staged a half-day walkout Friday, forcing Lufthansa to scrap more than 760 flights, most of its short-haul service.

“The good thing about a full-day strike is that the planes will be where they are supposed to be tomorrow morning, meaning Lufthansa will be able to quickly get back to their normal schedule,” analyst Rothenbacher said.

Long-haul flights operating as scheduled Monday included six from Frankfurt to destinations including Madras in India, three from Munich - to cities including Charlotte, N.C., and Chicago - and three from Dusseldorf.

Lufthansa’s Swiss unit listed 13 canceled flights on its website, while the Austrian Airlines division said Sunday that services would run as scheduled.

Among Lufthansa’s Star Alliance partners, SAS AB halted 56 flights in anticipation of disruption, Check-in. dk reported. United Continental Holdings Inc. listed Lufthansa code-shares as canceled, while Singapore Airlines Ltd. said services weren’t affected, with some fuller than usual as passengers rebooked.

German rail operator Deutsche Bahn AG added trains, with Lufthansa customers traveling within the country able to exchange tickets for rail-travel vouchers.

A fourth round of talks between Lufthansa and unions is scheduled for next Monday and Tuesday, and a fifth for June. If the negotiations fail, Ver.di will hold a vote on unlimited strikes, Behle said, adding that the labor group isn’t interested in mediation, which solved the cabin-crew conflict in September.

Juergen Pieper, an analyst at Bankhaus Metzler in Frankfurt, said workers will most likely settle for a pay increase of 3.5 percent to 4 percent,and that Lufthansa has realized already that any job cuts will have to be voluntary.

Because of the strike, the airline canceled nine flights scheduled for today, according to its website.

Lufthansa joins a long list of carriers that have faced strikes in recent years. Madrid-based Iberia, sister unit of British Airways, scrapped almost 40 percent of its schedule in a five-day action over job cuts in February, rebooking 85 percent of the 70,000 passengers affected with other Oneworld carriers.

In Australia, Qantas Airways Ltd. CEO Alan Joyce grounded the entire fleet in 2011 at a cost of more than $100 million in a spat over pay and jobs.

In 1998, most of Air France’s 3,200 pilots staged a nine-day strike that forced it to cancel 75 percent of flights in the week heading up to the World Cup soccer championship.

Information for this article was contributed by Robert Wall and Dorothee Tschampa of Bloomberg News.

Business, Pages 23 on 04/23/2013