Pay strike grounds 40 per cent of Lufthansa flights

German union demands 5.2 per cent wage increase for cabin, ground crew

(Reuters) — Lufthansa cancelled close to 40 per cent of its flights on March 21 as staff went on strike on the eve of wage talks with the German airline, which is trying to cut costs to compete with Middle East and low-cost carriers.

The strike, announced by labour union Verdi on March 20, left exasperated passengers stranded as they waited in long lines snaking through Frankfurt airport's Terminal 1, the home of Lufthansa.

"Once a year, I fly to Germany around this time of year. Last year I got stuck in a strike, and now it's happening again," passenger Markus Friedrich said, adding not much remained of the "German efficiency" for which his home country is known.

A group of Japanese teenagers slept on the ground in a corner of the building, kept company by piles of suitcases waiting for pickup. The strike was to end mid-morning, but caused delays and almost 700 cancellations throughout the day.

Efforts by big European airlines such as Lufthansa and Air France-KLM to shrink costs in the face of soaring jet fuel prices and fierce competition from Middle Eastern airlines and low-cost carriers have fanned tensions with workers.

Verdi is demanding a 5.2 per cent pay rise for 33,000 cabin crew and ground staff at Lufthansa Cargo, Lufthansa Technik, Lufthansa Systems, catering unit LSG Sky Chefs and ground crews. It also wants a commitment by Lufthansa to safeguard jobs.

Lufthansa, Europe's biggest airline by revenue, wants to freeze pay and get staff to work an hour more each week to help it to remain competitive.

It is cutting 3,500 jobs, revamping low-cost carrier Germanwings and bundling procurement for its airlines as it seeks to cut costs and improve earnings.

Last year, Lufthansa agreed to a mediated deal to raise cabin crew pay almost 4 per cent, adding 33 million euros to Lufthansa's costs, after a series of strikes forced it to cancel more than 1,000 flights.

Staff costs accounted for just over one-fifth of its overall operating expenses last year. That compares with a 30 per cent share at Air France but budget airlines like Ryanair and easyJet have a much lower cost base, with a comparable figure closer to 10 per cent, allowing them to undercut legacy carriers on price.

Lufthansa — which in the past has said a strike wiping out most of its traffic could cost it 25 million euros a day — has cancelled most of Thursday's scheduled domestic and European flights but aimed to get most intercontinental flights away.

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