Lufthansa to cut flights at major German hubs

Bloomberg

Deutsche Lufthansa AG will suspend almost its entire flight operations in Frankfurt and Munich on Friday because of a strike by pilots who are demanding higher pay, adding another day of major disruptions to what has already turned into a summer of travel chaos.
In total, about 130,000 passengers will be affected as Lufthansa scraps 800 flights at its two biggest German hubs, according to a statement. Some disruptions will already occur, according to the carrier. Lufthansa fell as much as 4% in Frankfurt.
Pilots at Lufthansa called a one-day strike following the collapse of wage talks. Lufthansa said it has “absolutely no understanding” for the decision to strike, after making what it called “a very good and socially balanced offer.” According to the airline, giving in to pilot demands would increase payroll costs by more than 40%.
It’s the second time in little over a month that Europe’s largest carrier has been forced to enact an almost complete shutdown of operations at its two most important airports because of strikes. Last time in late July, ground crew brought business to a standstill in Frankfurt and Munich as they also sought better pay conditions, resulting in the elimination of more than 1,000 flights in the two cities.
A quicker-than-expected recovery in air travel has clashed with a shortage of staff at airlines and airports after deep cuts during the Covid-19 pandemic. That’s brought a summer of chaos for the industry, with Lufthansa and other carriers canceling thousands of flights. Meanwhile, soaring inflation is triggering a wave of industrial action.
“We want solutions at the negotiating table,” Lufthansa Personnel Chief Michael Niggemann said in a statement, adding that what the company has tabled is “a good basis for continuing talks.”
Conversely, the VC Pilot Union demanded the airline present a “significantly improved offer.”
“We’re too far apart at the moment,” Marcel Groels, head of collective bargaining at the VC pilots’ union, said in a release.
Lufthansa sank as much as 23 cents to 5.7 euros in Frankfurt, its biggest decline since August 22. The stock has lost about 7.5% in value this year.
Labour disputes are roiling an industry trying to regain its footing after years of pandemic restrictions. British Airways pilots have also threatened to strike, with negotiations ongoing. The carrier agreed a bumper 13% deal with check-in staff in July to avert a planned walkout at the peak of the summer travel season.
The carrier was forced to scrap 13% of its schedule during the summer, and has culled 10,000 flights over the winter period, due to a staffing shortage. Some of Ryanair Holdings Plc’s Spanish cabin crew have also begun four-day strikes planned for each week for the next five months.
Lufthansa said the union’s demand would increase cockpit personnel costs of 2.2 billion euros ($2.2 billion) by more about 900 million euros over the next two years.
The airline last month said it sealed a wage deal with the Verdi labor union that represented 20,000 of its ground crew. Pay increases ranged from 13.6% to 18.6% after a warning strike led to hundreds of cancellations at the carrier’s Munich and Frankfurt hubs.
Pilots at Lufthansa’s Eurowings discount carrier on Thursday voted in favor of possible strike action to push the airline for a deal on wages, flight-duty hours and rest periods. The Eurowings ballot is not a decision to strike, but a warning to the carrier to reach a solution, the VC union said.
The discout unit’s operations won’t be affected by the strikes on Friday, Lufthansa said.