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Lufthansa cancels dozens of long-haul flights due to strike Tuesday

Posted by: Admin | Posted on: September 7th, 2015 | 0 Comments

BERLIN Lufthansa canceled just under half of its long-haul flights planned for Tuesday after pilots’ union Vereinigung Cockpit (VC) called an all-day strike in a long-running dispute over pay, retirement benefits and cost cuts.

The union said on Monday the strike, the 13th walkout in 18 months, would affect long-haul passenger flights and cargo flights out of Germany from 0600 GMT to 2159 GMT on Tuesday.

However, Lufthansa said it would operate 90 out of about 170 planned long-haul flights for Tuesday and all seven cargo flights thanks to pilots volunteering to work.

Lufthansa is trying to cut costs as it battles to maintain market share against budget rivals such as Ryanair.

Relations between the union, which represents around 5,000 Lufthansa and Germanwings pilots, and management broke down again last week. The union has offered concessions, including increasing the average retirement age to 60 and looking at ways to bring costs down to a level comparable with easyJet.

“With our offer, we made it clear that the pilots are not against the necessary adjustments,” VC spokesman Markus Wahl said on Monday.

As a precondition for talks, VC wants Lufthansa to halt the process of employing staff on non-German contracts for the expansion of its budget Eurowings division, which has an Austrian operating license.

In an interview with Reuters on Friday, Lufthansa Chief Executive Carsten Spohr said over 1,000 pilots from within the group and outside had applied for jobs at Eurowings.

“To create an airline’s operating certificate in another country is something the other low-cost carriers do and we copied that model for our low-cost operation,” he said.

Spohr’s hard line with the pilots is reminiscent of peer Willie Walsh’s stance with crew at British Airways and Iberia, with the cost cuts achieved helping parent group IAG to report stronger profits than Lufthansa or Air France-KLM.

However, analysts point out Walsh was negotiating during the financial crisis and when oil prices were high, whereas Spohr has a tougher job, given the backdrop of low oil prices and rising passenger numbers.

IAG is this year aiming for operating profit in excess of 2.2 billion euros ($2.3 billion), while Spohr said on Friday Lufthansa would “comfortably” achieve its target for adjusted earnings before interest and tax of over 1.5 billion euros this year. That target does not include the impact of strikes, which have cost Lufthansa around 100 million euros this year already.

DZ Bank analyst Dirk Schlamp said the costs of Tuesday’s strike could be under 10 million euros but that it was difficult to predict.

Lufthansa said on Monday it had offered talks over the weekend. VC said the offer provided no basis for talks.

(Additional reporting by Peter Maushagen and Ludwig Burger; Editing by Thomas Atkins and Mark Potter)

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