Lufthansa averts pilots’ strike after last-minute pay raise offer

Bloomberg

Deutsche Lufthansa AG averted a disruptive pilot strike after raising its pay offer, a move that will avoid cancellations while complicating the airline’s efforts to boost profit and pay down debt.
The VC pilots union spokesman said the union decided to call off a planned two-day walkout after Lufthansa improved its offer. The union didn’t immediately comment on terms of the new conditions. Lufthansa’s stock has fallen about 3% since the start of the year.
Late last month, the union — which represents about 9,600 members — voted overwhelmingly in favour of walkouts. Lufthansa’s pilots are demanding wage increases to help offset the near double-digit increase in consumer prices. A walkout by ground crew caused the carrier to scrap hundreds of flights at its Frankfurt and Munich hubs just last week.
Europe’s aviation industry has been plagued by chaotic operations in recent months, partly because of a lack of ground personnel in areas from security to baggage handling, and as employees push for higher wages to grapple with soaring costs of living.
Travel demand has roared back as people return to business trips and vacations after being stuck in lockdowns for the better part of two years, pandemic-fighting measures that pushed Lufthansa to the brink of bankruptcy in 2020 and left it saddled with billions of euros in debt.
In a bid to cut the carrier’s debt pile, Lufthansa Chief Executive Officer Carsten Spohr has pledged to boost the airline’s earnings margin to a minimum of 8% by 2024. Disputes with worker representatives and concessions over pay suggest Spohr might have trouble reaching those goals, as he tries to balance the need for more staff with a push to cut costs.
Meanwhile, an aviation staffing crisis that disrupted flights across Europe this summer is most acute among a younger category of workers who largely left the industry during the coronavirus outbreak, according to official data.
Only about a third of the European Union’s air transport workers were aged under 40 as of the first quarter, figures from the bloc’s Eurostat statistical office show, a much lower proportion than before the pandemic.
The numbers reveal the size of the task facing airlines and airports as they seek to lure new recruits to an industry where posts in areas such as security, cleaning and ground handling can require a long journey to work and unsociable hours at modest rates of pay.
Hiring to so-called air-side roles is also complicated by requirements for specific training and extensive security checks, during which attrition can be extremely high as candidates secure posts with closer start dates elsewhere.
“Fundamental changes in the business model have to occur for aviation to remain a competitive career option,” said David Huttner at PA Consulting Group Ltd. “The industry has always been susceptible to staffing issues within key skill sets, but not at this level.”

About 320,000 people worked in EU air transport in the first three months, according to Eurostat, a quarter fewer than in the equivalent period of 2020, before Covid lockdowns led to mass layoffs, and the lowest tally in 14 years.