Lufthansa has been brought to a standstill by a strike of a large number of its German employees. Monday will see almost all flights in Europe cancelled as well as “massive flight cancellations and delays ….for long-haul flights beginning Sunday April, 21” according to a company press release.
Lufthansa Cargo will be severely affected by the strike with the division issuing a statement that said it “will only be able to guarantee emergency operations in both export and import” and asking customers to “re-schedule planned drop-offs and pick-ups to before or after the strike.” The company also published a list of five cargo flights from Frankfurt to Johannesburg, Shanghai, Chicago, Guangzhou and Quito which were scheduled to take-place under a “special flight plan”.
The industrial action is designed to be a “warning strike” by the Verdi trade union which includes ground crew at Lufthansa cargo operations. They are demanding a 5.2% pay increase and an assurance of no compulsory job losses. The company criticised the action as being “out of proportion” at what it said was an early stage of negotiations.
This is taking place around a backdrop of restructuring at Lufthansa. In an attempt to reduce its cost base the airline is placing greater reliance on its subsidiaries based outside Germany which have more competitive manning levels and pay rates. Although Lufthansa remains profitable, it has shrunk its cargo fleet aggressively over the past year and a half in the face of a sharp downturn in demand. At a wider level, Lufthansa is threatened by a combination of low-cost airlines on routes within Europe and the Gulf-based carriers on inter-continental business.Over the past year, Lufthansa has suffered from a series of strikes by both its ground crew and its pilots centred mainly around pay, which for certain groups of employees – such as pilots – is very high, even by the standards of the ‘flag carrier’ airlines.
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)