Lufthansa is now also threatened with a pilot strike

The criticism ignited above all at CEO Carsten Spohr. “The group’s board of directors is pursuing a personnel policy that is designed to play employee groups off against each other,” the group’s personnel representatives recently wrote to the members of the supervisory board. So far, Spohr has been publicly reticent in the collective bargaining disputes.

According to Lufthansa, this is the task of HR Director Michael Niggemann. But in the heated mood, he finds it difficult to get his legally stretched formulations through to the staff.

The time to prevent another strike is running out. In the worst case, ground staff and pilots will take turns with their walk-ins over the next few weeks.

Tariff expert Gröls from the VC does not want to give up the confidence that there will be no strike. He has confidence that “those involved at the negotiating table can find solutions”. It can be heard from those close to the Verdi union that the chances of reaching an agreement next week should have increased after the heavy strike with 1,000 canceled flights.

Many in the workforce hope that they will not have to go on strike again – at a time when, due to a lack of staff, many things are not going smoothly in the operative business anyway. “I would be happy if that could be settled through talks, but our level of frustration is very high,” says the pilot of a Lufthansa Airbus A320.

Cockpit Association calls for uniform tariffs for Lufthansa flight personnel

The conflict with the VC in particular is extremely complex and difficult to resolve. It’s primarily about money. 5.5 percent more wages for this year and then automatic inflation compensation – that’s what the union says on the list of demands. While such figures can still be negotiated, another target is likely to be difficult. The VC wants a uniform tariff structure for the entire cockpit staff in all ten Lufthansa flight operations – with the best remuneration at the parent company as a benchmark.

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It’s hard to imagine that CEO Spohr would give in here. The industrial engineer is a trained pilot himself, which is why VC was initially confident when he was appointed that someone from their own camp would take the helm. But that changed quickly. Spohr feels blackmailed by the unions. “He took that with him from Jürgen Weber when he was a consultant to the then CEO,” says a long-time companion of the company. Former Lufthansa boss Weber was known for taking a tough line with pilots.

The pilots felt the consequences in 2016. For almost five years, VC had been fighting with the management for new collective agreements, accompanied by ever new waves of strikes. In the end, an agreement was reached, but the pilots in the so-called group collective agreement – which is also the subject of the current conflict – had to hand over the flights beyond the Frankfurt and Munich hubs to the subsidiary Eurowings.

Lufthansa management openly threatens to repeat this pattern in the current collective bargaining dispute. If no agreement is reached, the core Lufthansa brand will become a purely long-haul airline. There, high pilot salaries are negligible in cost accounting. The feeder flights to Frankfurt and Munich would then go to the new subsidiary Cityline 2.0, whose pilots should fly for less money. “In the past few years, we have experienced a predominantly confrontational course,” says a pilot of the core brand.

Even if Spohr leaves the actual negotiations to the responsible personnel managers, the group boss sets the direction. That doesn’t always make things easy for the negotiators. According to VC circles, Spohr conceded an agreement with VC that had already been approved by the Lufthansa Cargo board on a program for voluntary departure from the freight subsidiary.

A spokesman for the company does not want to comment on the current wage conflict and refers to the ongoing negotiations. But those close to the board of directors countered and argued that Cityline 2.0 is primarily about getting the high costs on short-haul routes, i.e. the feeder flights to Frankfurt and Munich, under control.

An A320 pilot can earn well over 200,000 euros in the group wage agreement. This means that you cannot compete with low-cost providers such as Easyjet or Ryanair. At Eurowings, the same pilot would earn 80,000 euros less than at Lufthansa and still have enough to live on. In addition, it is noticeable that it is always the pilots of the well-endowed group collective agreement who complain. One manager says that one rarely hears anything from the pilots of the other group airlines.

Lufthansa: Emotional dispute overshadows the collective bargaining conflict

It is an emotional dispute fueled by what is seen as hasty management action. At the end of last year, Lufthansa announced the so-called perspective agreement. In it, the Lufthansa leadership and VC had stipulated that at least 325 aircraft be kept ready for the pilots of the group wage agreement.

Admittedly, such a perspective agreement is not subject to collective bargaining. It is therefore not permissible to go on strike to preserve them. But the dismissal, which was perceived as an affront by many pilots, is now superimposed on the dispute over other collective agreements.

On the Lufthansa side it is said that there was no other option at the time. The pandemic forced the group to downsize its fleet.

But even Spohr recently admitted that the termination could have been avoided if the fleet had been planned a little more optimistically. However, he does not want to change anything about his basic course. Production, i.e. flight operations, will go where it is cheapest, he says internally.

But even at management level, not everyone seems to be convinced that this course is sustainable. After all, the salaries of the pilots account for only between three and five percent of the total cost of a flight, some say. Others, on the other hand, argue that this only applies to long-haul routes; the proportion of salaries is significantly higher on short-haul routes.

The company’s management circles also point out that there are other, much more relevant cost drivers that arise primarily from the complexity of the company. For example in the group structure: On the one hand, Lufthansa is a kind of holding company, under which the individual flight operations are linked. On the other hand, the Lufthansa core brand is still part of the parent group and is only to be separated out in the future.

Another problem: The fleets of the individual flight operations are not as harmonized as actually planned. At the same time, there is no clear demarcation of tasks between the many flight operations. Added to this is the lack of IT integration between the individual flight operations.

It is a criticism that can be heard again and again from those close to the Supervisory Board. Lufthansa has grown significantly through acquisitions in recent years, but has not yet managed to leverage existing synergies in the large empire, it says there.

Admittedly, such information does not help in the current collective bargaining conflicts. How quickly the collective bargaining parties will find a solution here and if at all, no one can really estimate at the moment – neither at Lufthansa nor on the union side.

Even if CEO Spohr is crisis-tested, the next few weeks should be a challenge for him. The school holidays in Bavaria start at the weekend. It’s time for the father-of-two to take some time off sometime in the next few weeks. It is quite possible that he will have to interrupt his vacation, as he has often done in the past, in order to prevent a complete escalation in the collective bargaining conflicts.

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