August 28, 2012 / 1:47 PM / 5 years ago

Lufthansa strikes loom after cabin crew talks fail

FRANKFURT (Reuters) - Passengers of German airline Lufthansa (LHAG.DE) faced hundreds of possible flight cancellations after cabin crew representatives outlined strike plans for the next few weeks following the collapse of last-ditch pay talks.

Passengers of German air carrier Lufthansa queue at a baggage drop-off at Fraport airport in Frankfurt August 28, 2012. REUTERS/Kai Pfaffenbach

The UFO union, which represents 18,000 Lufthansa flight attendants, said on Tuesday it would give only a few hours’ notice for most strikes, raising the threat of flight disruption.

UFO head Nicoley Baublies said the first strike could come as early as Wednesday and focus on selected airports. “We could hold the strike for five or six hours at a time at selected airports,” he said.

The dispute is the latest for Lufthansa as it grapples with rising costs, tough competition and economic uncertainties.

Costs of a drawn-out stoppage could quickly mount for the airline, which said in 2010 a four-day strike by pilots would cost it 25 million euros ($31.3 million) a day in lost revenue.

“The cost could reach millions on a day with a lot of traffic,” Lufthansa board member for passengers business Peter Gerber told reporters on Tuesday.

Gerber said Lufthansa had offered a package equating to a pay rise of about 3.5 percent.

“Given the difficult competitive environment we demand all staff to make their contribution,” he said, pointing to the need to slow down pay rises and extend working hours.

He said Lufthansa was prepared to stop hiring temporary workers but not indefinitely as demanded by UFO.

SWIFT ACTION

The union - which wants a 5 percent pay rise for its members after a three-year pay freeze - last week called on members to start preparing for a strike so it could take action as swiftly as possible.

Negotiations between the union and Lufthansa, Germany’s leading airline, to end a 13-month pay dispute broke down late on Monday.

Lufthansa, which typically operates around 1,850 flights a day, said it still wanted to negotiate a deal with the union, which has also called for a better profit-sharing scheme and guarantees that jobs will not be outsourced or given to temporary workers.

It said it would give details of its contingency plans only when the union gave strike times, and would do everything possible to minimise disruption.

The move comes as Lufthansa cuts 3,500 jobs - about 3 percent of its global workforce of 117,000 - and freezes investment, aiming to boost earnings which had been squeezed by soaring fuel prices and competition from low-cost and Middle East carriers.

Lufthansa has also shifted the contracts of pilots and flight attendants at carrier Austrian Airlines to a lower-cost subsidiary and has boosted cooperation between its main Lufthansa brand and low-cost carrier Germanwings.

While UFO has said that any airline paying a dividend does not need such drastic cuts, Lufthansa executives last week defended the savings plan, saying the airline needed to take action to maintain its position in Europe.

Lufthansa shares pared losses and were down 1.5 percent at 9.77 euros by 1255 GMT, underperforming Germany’s blue-chip DAX index .GDAXI, which was 0.4 percent lower. Shares in Fraport (FRAG.DE), the operator of Frankfurt airport which could also be affected by flight cancellations, were down 0.2 percent.

($1 = 0.7990 euros)

Writing by Maria Sheahan and Marilyn Gerlach; Editing by David Holmes and David Cowell

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