FRANKFURT— Deutsche Lufthansa AG DLAKY -4.89% faced new turmoil as a strike stranded thousands of passengers in Germany and much of Europe, while local media reported that a senior executive responsible for a restructuring plan at the airline is stepping down.

Lufthansa, Europe’s biggest airline by passengers, said it canceled nearly 690 flights Thursday as staff walked out on a seven-hour strike ahead of talks expected Friday over pay and working conditions.

Lufthansa’s board member responsible for labor relations, Stefan Lauer, is set to resign June 30, German media reported. The airline declined to comment, and Mr. Lauer wasn’t available for comment.

The strike was the latest in a series of Lufthansa stoppages that have disrupted air travel in Germany in the past year and taken a chunk out of the airline’s earnings. Lufthansa is trying to bolster its finances so it can avoid jeopardizing a planned multibillion-euro investment in new, more-fuel-efficient aircraft.

In the first round of negotiations between Lufthansa and the ver.di union, which ended in February, the union demanded a 5.2% wage increase over 12 months. Lufthansa has asked employees for a two-year freeze on wages and a one-hour increase in the working week.

Strikes by Lufthansa employees and airport workers cost the airline €33 million ($43 million) last year. Lufthansa’s operating profit fell more than 36% to €524 million even though revenue increased nearly 5%, to €30.1 billion.

Lufthansa isn’t alone among European airlines in confronting angry staff as the carriers try to cope with high fuel prices, fierce competition and slack economic activity. Staff at Iberia, the Spanish unit of International Consolidated Airlines Group SA, have struck on and off to protest a restructuring plan for the unprofitable airline. A revised restructuring program accepted by Iberia employees averted strikes planned for March.

Lufthansa’s cancellations on Thursday mostly affected domestic and short-distance flights, with long-distance flights largely going ahead as scheduled. The strikes took place at German airports, in Frankfurt, Hamburg, Berlin, Düsseldorf, Cologne and Munich, and several other locations.

A Lufthansa spokesman said the strike, which the unions had announced in advance, didn’t disrupt travel as much as last year’s work stoppages because passengers had time to make alternate plans. The airline wasn’t able to estimate what the strike would cost the carrier, he said.

A work stoppage by security personnel at several airports over the past two months meant that thousands of passengers couldn’t reach their flights. Labor action by Lufthansa cabin crew last year caused widespread chaos.

This article was published by The Wall Street Journal on March 21, 2013.

Lufthansa Faces Cabin-Crew Strike – WSJ

Nicky Redl — Wed, 29 Aug 2012 01:50:00 +0000

FRANKFURT—Deutsche Lufthansa AG faces open-ended strikes by cabin crew in Germany this week after negotiations with the union representing onboard staff failed to settle a dispute over wages and the airline’s plan to hire temporary staff and outsource some positions.

The UFO labor union Tuesday said it is preparing for strikes that may start anytime from Wednesday and involve up to 19,400 crew members.

A Lufthansa spokesman said any industrial action would cost the airline millions of euros each day and the company is examining its legal options, without going into further detail.

Lufthansa last week vowed to press ahead with a sweeping cost-saving program, including the elimination of 3,500 administrative jobs, to improve long-term profitability due to high fuel prices and worsening economic prospects in Europe.

“It’s very important for Lufthansa to stick to its plans if it wants to stand up to low-cost and other competition, important enough that it has to hazard the consequences of strikes,” Commerzbank analyst Frank Skodzik said.

A 2009 file picture shows Lufthansa staff on strike at Frankfurt airport. The union representing Lufthansa cabin crew says its members plan to strike after talks on pay and conditions broke down. Associated Press

In April, UFO demanded a 5% wage increase for about 18,000 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.

Like other European flag carriers, Lufthansa’s short-haul operations face increasing competition from leading discount carriers like Ryanair Holdings PLC and easyJet PLC. Air France, the French unit of Air France-KLM SA, and Iberia, the Spanish arm of International Consolidated Airlines Group, have said changing pay and conditions for staff on domestic routes to make them more competitive with budget airlines is vital to bring their short-haul operations back to profit. Like Lufthansa, Air France is considering the elimination of thousands of jobs.

In April, UFO demanded a 5% wage increase for about 18,000 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 said Tuesday it offered a 3.5% wage increase and is willing to forgo hiring temporary workers for three years.

Lufthansa has faced industrial action this year. In February, about 1,700 flights were canceled in Frankfurt, Europe’s third-busiest airport, due to industrial action by the GdF union, which represents airport operator Fraport AG’s ground staff. Fraport said the cancellations cost it around €4 million ($4.9 million) and Lufthansa said the strikes cost the airline at least €10 million.

The airline also had to cancel about 50 flights in 2009 after cabin crew staged strikes for several hours in Berlin and Frankfurt. At the time, UFO said Lufthansa suffered damages of about €50 million.

This article was published by the Wall Street Journal on August 28, 2012

Deutsche Lufthansa – Nicky Redl

Lufthansa Cancels Flights as Workers Strike – WSJ

Lufthansa Faces Cabin-Crew Strike – WSJ