Lufthansa Strike Displays German Thoroughness, Expert Says | Business| Economy and finance news from a German perspective | DW | 31.07.2008
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Lufthansa Strike Displays German Thoroughness, Expert Says

DW-WORLD.DE spoke with aviation expert Cord Schellenberg about the costs and effects of the strike at Lufthansa, German organization and the demands on the table.

Lufthansa sign

The price of the strike isn't yet high enough for Lufthansa to give in on wage demands

DW-WORLD.DE: The trade union Verdi has estimated that the strike is costing Lufthansa about 5 million euros ($7.8 million) a day. Is this an accurate estimation in your opinion?

Cord Schellenberg: It's one speculation. It's possible that the costs for Lufthansa are even higher, depending on how much external equipment and personnel it has to buy in. But the strike is definitely having an effect on Lufthansa.

First of all, they have to inform all of their passengers around the world that they have to rebook their flights. At the same time, they also have to set up replacement flight routes, change the technical planning for the planes and rework the flight crew schedules.

In terms of organization, it's a lot of work for Lufthansa. It also means financial costs, but, at the moment, it appears that costs are still lower for Lufthansa than if they accepted the employees' current demands.

Will Lufthansa lose customers over the long term due to the strike?

Cord Schellenberg

German even organize strikes well, Schellenberg said

I think that customer faithfulness is very high at Lufthansa. That's true both of customers on discount flights that are glad to be flying on a premium airline and of those that pay full price.

In the middle and long term, people will forget the whole thing pretty quickly -- particularly because the typical German value of "thoroughness" is apparent in how well Lufthansa has re-planned the flights. I think people are impressed by that.

In other countries, like Italy for example, a strike always means chaos. But here in Germany, even the strike is organized. The airline is able to manage and goes to great expense to make the effect on passengers as small as possible.

However, the consequences in the freight division will be more strongly felt than on the passenger side, because the freight customers see that their shipments can't be sent. On the other hand, the explanation is reasonable for everyone.

So the strike could actually have a positive effect on Lufthansa's image?

Pilots in the cockpit

The pilots have gotten first-class treatment in the past

At least it could bring recognition from the passengers. Everyone knows that strikes aren't common in Germany, but also that they can't be avoided. However, most strikes are conducted in such a way that the company doesn't have any chance to react. In this case, I think both sides are very prudent, and that's certainly something the passengers will recognize.

It's not good for Lufthansa's image -- that would be going too far -- but I think most people would say, Wow, the Germans can even organize a strike well.

Ticket prices are something that affects the passengers even more. Lufthansa, like every other airline, is hit hard by rising fuel prices as well as the emissions trading program that the EU has approved to start in 2012. Can travelers expect higher ticket prices in the near future?

Yes, that's not dependent on the strike. It's just a realistic view of the developments in the global economy. When the economy cools down, the movement of people and goods naturally does as well. The increase in kerosene prices came at the same time.

Verdi union members

Verdi is losing members

Personnel costs are a separate matter. It's a normal part of business that personnel costs increase. The Lufthansa employees say, "The company did well in the past few years. Now we want to earn more too." That's something that happens every year or so when wage negotiations take place and it doesn't have to mean higher costs for the passengers.

However, I think 1 euro, 19 euro and 29 euro tickets are now a thing of the past. They never really existed anyways, because they were more of a marketing gimmick.

There is a large discrepancy between Lufthansa's offer and the pay increase demands the union is making. Are Verdi's demands reasonable?

In the past few years, Verdi has been sensitive and made demands that were reasonable for the airline. But they were continuously passed up by the pilots. The pilots were in Formula 1, so to speak, and the others in Formula 5. Formula 1 is nice and the pilots always made use of it. And Verdi always responded reasonably, but now that approach is over.

The airline should ask itself if it's really healthy to give the pilots such a prominent position as a pressure group in wage negotiations and to tell the more expendable employees -- check-in personnel, flight attendants and catering staff -- that they don't have such a prominent position.

Verdi is responsible for the technicians, which can also be a pressure group, especially if they're highly qualified. If they don't do their job, the planes can't be approved for takeoff. Verdi knows this and is taking advantage of it.

The flight attendant union that is in competition with Verdi is demanding 15 percent in the wage negotiations. That shows the high stakes involved. Verdi really wants to achieve something for its members and doesn't want the flight attendants in its organization to switch over to the other union.


There's a strong tradition of compromise in Germany, said Schellenberg

Verdi has been particularly active in the past few months with a series of strikes. Have they been emboldened by recent successes?

Verdi is a bit like the SPD [Social Democratic Party] in Germany: They're losing members. While SPD puts on a show all year, Verdi is trying to nail down some successes and achieve something for its members.

Lufthansa hasn't made a counteroffer but said it's willing to negotiate and private, informal have taken place. Are they dealing with the strike in the best way?

As I said, the Germans can organize a strike well, on both sides. It's also a tradition in Germany to find a compromise.

I think the population is relatively relaxed. It's different than it might be in the US, for example, because here people say, "They'll come to an agreement." You can't prescribe how they reach an agreement, but in the end both sides will calculate the costs and decide when they have to compromise.

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