Flying Lufthansa this week? Pilot strike may disrupt your travel
What's the story
Deutsche Lufthansa AG pilots have announced a two-day strike starting March 12. The action could disrupt hundreds of flights from German airports. The strike is over issues related to pilot pension contributions and wage agreements, following a similar disruption in February that cost the airline €15 million (approximately $17.4 million).
Impact scope
Strike to impact flights from German airports
The strike will start at 12:01am on March 12 and end at 11:59pm on March 13. It will impact flights operated by Lufthansa's mainline carrier and its cargo operations from German airports, according to a statement by the pilots' union Vereinigung Cockpit. However, it won't affect Middle East-bound flights operated by both Lufthansa mainline and Lufthansa CityLine.
Response to strike
Lufthansa shares fall on strike announcement
Lufthansa has expressed its disappointment over the short-notice strike announcement, saying it would have "an extremely severe and disproportionate impact on our passengers." The airline has urged the union to return to negotiations. Meanwhile, shares of Deutsche Lufthansa AG fell as much as 2.4% in early trading in Frankfurt on Wednesday.
Financial impact
Strike follows costly disruption in February
The upcoming strike comes after a one-day walkout in February that led to the cancellation of nearly 800 flights and impacted around 100,000 passengers. The disruption cost the company approximately €15 million ($17.4 million), according to Chief Executive Officer Carsten Spohr. Negotiations between the airline and union have stalled over pilot pension contributions, with the latter seeking higher company contributions.
Profitability pressure
Labor dispute adds pressure to Lufthansa's profitability efforts
The renewed labor dispute adds to the pressure on Lufthansa's efforts to improve its profitability. The airline is cutting 4,000 administrative jobs and shifting more short-haul flying to lower-cost units such as City Airlines and Discover Airlines. These changes are part of a strategy where crew costs at these units are up to 40% lower than at the mainline carrier.