Lufthansa CEO: Company must defeat pilot strike to survive

Frankfurt - Deutsche Lufthansa chief executive officer (CEO) Carsten Spohr said Europe’s third-largest airline must hold its nerve and face down striking pilots if it’s to deliver meaningful savings and survive as a force in aviation.

Taking on the pilots “is not about being tough,” but “about the future of Lufthansa,” Spohr said in an interview in Berlin on the eve of a second day of walkouts by cockpit crew. If the company caves in to pay demands it has “no chance of survival” he said.

Lufthansa has already canceled almost 1 900 flights at its mainline operation through midnight on Thursday, wiping out 40% of the timetable including premium services to Beijing and Los Angeles, and disrupting travel for more than 215 000 people.

Scrapped services may top 2 500 by the end of a third day of action Friday, when disruption will be limited to short-haul operations.

A long-running spat over wages, working conditions and the expansion of Lufthansa’s low-cost Eurowings arm has reached new levels of bitterness after Spohr sought to block what had been planned as a single day of action.

When a Frankfurt labor court dismissed the case and an appeal failed, the Vereinigung Cockpit union retaliated by extending the protest for two days. Lufthansa hit back by reviving a two-year-old legal claim against the labor group.

While Spohr has repeatedly offered to bring in a mediator, Vereinigung Cockpit is unwilling to return to talks without an improved pay proposal. The union is seeking a 20% raise for the period spanning 2012 through 2017, or 3.7% a year. Lufthansa has offered 2.5%, or 0.38% annually, through 2018.

‘No leeway’

“There is no more leeway for even better offers when escalation is what is wanted, as opposed to a solution,” Spohr said. “In the past months we have made all kinds of different and improved offers. The solution can only be arbitration.”

The CEO said he’d have to cull more weaker routes - something Lufthansa is already doing - if he accepted the union proposal and costs rose. The company has also faced opposition from cabin crew at Eurowings, who walked out on Tuesday at a cost of 64 flights.

“We want to be able to grow again, within the group, and also at the core Lufthansa brand,” he said. “That’s what we aim for. We want to stop shrinking and start going again. In order to be able to do that, we need competitive structures.”

The walkouts may be costing Lufthansa about €10m a day, based on figures from previous disputes and the number of services affected.

Stefan Schulte, CEO at Fraport, which runs Lufthansa’s main Frankfurt hub, also spoke in Berlin and urged Vereinigung Cockpit to embrace Spohr’s offer of outside mediation.

“I am calling on all parties to come to a solution as quickly as possible,” he said. “That is in the interests of all our passengers. I am appealing to the union to take on Carsten Spohr’s call for an arbitration.”

Even before this week’s strikes Fraport had forecast that its passenger numbers would decline this year.

Lufthansa shares traded 0.8% higher at €12.89 as of 11:26, paring their decline this year to 12%. Fraport was price 0.4% lower.

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