Costs mount for Lufthansa as pilot union’s strike enters second week
November 29 2016 11:45 PM
A flight passenger stands before an information board that shows most Lufthansa flights as cancelled
A flight passenger stands before an information board that shows most Lufthansa flights as cancelled yesterday.

Reuters/Berlin

Lufthansa pilots staged another walkout yesterday, with neither side showing any willingness to yield in a dispute that has already cost the German airline hundreds of millions of euros since early 2014.
The stoppage hit short-haul flights departing from German cities, forcing Lufthansa to cancel 816 out of around 3,000 planned flights yesterday.
The pilots have also announced plans to strike on short- and long-haul flights today, which will see a further 890 flights cancelled.
The strike is the 15th since the early 2014, and the costs are mounting.
Lufthansa has put the cost of the first two days of last week’s strike at about €20mn ($21mn), but past experience shows the effect on future bookings could cost tens of millions more.
Analysts at Kepler Cheuvreux downgraded Lufthansa shares to “reduce” from “hold” yesterday, saying that the strike jeopardised the company’s 2016 profit target of around €1.8bn.
Lufthansa says it has to cut costs to compete with leaner rivals such as Ryanair on short-haul routes and Emirates on longer flights.
Ryanair, keen to build market share in Germany, has been wooing customers there with what it calls a rescue offer.
“Industrial action is a great opportunity for rivals such as Ryanair and easyJet. They will hope to retain the customers that they may have captured as a result of the strike for the longer-term,” Liberum analyst Gerald Khoo said.
Lufthansa pilots are well paid by industry standards.
A pilot at Lufthansa earns on average €180,000 a year before tax, though a captain on the highest pay level can earn as much as €22,000 a month before tax.
Walkouts in 2015 by both pilots and cabin crew affected 7,748 flights, costing Lufthansa €231mn in lost profit, with around €108mn of that coming from lost advance bookings.
Including last week’s four-day walkout, Lufthansa has cancelled 4,500 flights this year.
Lufthansa has offered to increase the pilots’ pay by 4.4% in two instalments and make a one-off payment worth 1.8 months’ pay.
Union Vereinigung Cockpit wants an average annual pay rise of 3.7% for 5,400 pilots over a five-year period backdated to 2012.




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