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Deutsche Lufthansa AG

Lufthansa pilot strike's legality questioned

Kirsten Bienk and Jan Hromadko  Feb 18, 2010

FRANKFURT - Deutsche Lufthansa AG Thursday said it is examining the legality of next week's four-day pilot strike, warning that the walk-out would bring large parts of the German flag carrier's operations to a halt and cost around EUR25 million a day.

At Lufthansa's head offices in Frankfurt, executive board member Stefan Lauer told reporters the planned strike action was "disproportionate" and called the pilots' demands for stronger influence in the strategic decision making of the airline "inappropriate."

Lauer said that the legal examination of the strike action should yield initial results by Monday at the latest, but declined to say what the company would do if lawyers came to the conclusion that the action was illegal.

"I don't want to speculate before seeing the result," he said.

The comments come a day after German pilots' union Vereinigung Cockpit called a strike starting Monday in a dispute over pay and job security at Germany's No. 1 airline.

The union wants Lufthansa to concede pilots a bigger say in the decision making process about where planes are operated from and which pilots are manning the aircraft.

Vereinigung Cockpit fears that jobs could increasingly be shifted to foreign units where pilots earn less, after Lufthansa's rapid expansion over the past two years.

Despite the recession-related deterioration of trading conditions, Lufthansa embarked on a buying spree, acquiring Austrian Airlines AG, raising its stake in British Midland Airways, or bmi, as well as taking a 45% stake in the parent of a Brussels airline, SN Holding SA. Lufthansa also founded its own subsidiary in Italy.

Lauer said the length of the walk-out was "highly exceptional," and that the strike was the "sharpest weapon imaginable at the worst possible time."

The strike action comes at a difficult time for Lufthansa. Like all the world's airlines, the company has been hit hard by the downturn in the industry that has seen a decline in passenger numbers and cargo volumes.

The International Air Transport Association, or IATA, last month said the global aviation industry ended 2009 with the largest ever post-war decline, with passenger demand falling 3.5% on the year. Freight showed a full-year decline of 10.1%, IATA said.

For 2009, IATA had forecast the industry to post an accumulated net loss of a $11 billion.

Passenger and freight figures improved toward the end of 2009, but IATA said it expects a slow recovery, projecting the global industry to lose $5.6 billion in 2010.

Lauer said that Lufthansa still is in a critical situation, having to compensate the drastic fall in demand and increased competition from budget carriers like Ryanair Holdings PLC.

The strike is already affecting bookings as passengers switch to competitors, Lauer said.

He added that it would take a number of days after the strike before the airline's operations could be fully normalized.

Lufthansa pilot strike's legality questioned
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Source: Dow Jones

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