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Lufthansa’s Pilot Union Calls Off Strike; Rejects Pay Offer

Flight delays

On Friday, November 25th, 2016 Lufthansa’s pilot union decided not to extend their strike beyond the next day, but rejected the German airline’s pay offer. The union had been striking since Wednesday that week. The four-day strike affected more than 3,000,000 passengers and grounded multiple flights, causing a loss pegged between 7 and 9 million euros a day. This was the 14th strike since 2014 by the pilot union in a long-running dispute between them and the carrier.

The Vereinigung Cockpit pilot’s union also stated that any new strikes would be announced 24 hours prior to the event. The union had initially called a day-long strike on Wednesday, November 23rd 2016, but when the airline tried to stop the action, it decided to extend it by a day. The management deemed the move by the union “incomprehensible”.

Cul-de-sac

The union rejected Lufthansa’s offer to hike wages by 4.4% in two installments, along with a fixed compensation of pay equivalent to about two months. Pilots, like the cabin crew and ground staff, would in return have to change their pension scheme in which only paid-in contributions would be guaranteed. Lufthansa also additionally offered to hire a thousand junior pilots and create 600 traineeships over a five-year period.

The pilot union wanted a retroactive wage increase from 2012 for its five and a half thousand pilots at the rate of 3.7 percent per annum. Lufthansa maintained that despite their record 2015 profits, cost-cutting measures were necessitated by low-cost competitors like Ryanair. Compared to industry standards, a Lufthansa pilot is compensated well. The pre-tax earnings of a pilot can range between 15,000-22,000 euros a months.

Negative effects

By Friday, the patience of the passengers was thinning as short, medium and long-haul flights had been canceled. Travel websites reported that fewer people were booking flights on Lufthansa. The strike also had a negative impact on Lufthansa shares which dropped 13% in 2016. Investors were questioning the values of the carrier that it was renowned for, namely punctuality and reliability.

The airline company had ended another long-drawn dispute with their cabin crew in July, with both parties agreeing on remuneration and working conditions. There were job guarantees assured till 2021, but it also came with a no-strike rider. The cabin staff had earlier stopped work for seven days in November 2015, paralyzing the German airline after grounding close to 5,000 flights and 500,000 passengers.

The November 2016 strike by the Vereinigung Cockpit pilot’s union is set to affect the earnings of Lufthansa by 100 million euros in the fourth quarter. The carrier reported that despite the strike, they had a six percent increase in the number of passengers in November, compared to the previous year.

The way forward

At a time when the European Union has come up with an airline strategy to help EU airline companies, strikes like these can impact both passenger morale and the economy negatively. Mediation through talks can help the aviation industry which is already reeling from factors that it has no control over, like terrorism.

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