BERLIN/FRANKFURT (Reuters) - The German pilots’ union will extend its strike at Lufthansa (LHAG.DE) into Wednesday after a walkout already planned for Tuesday in a long-running dispute over pay, benefits and cost cuts.
Tuesday’s strike, the 13th in 18 months, affects long-haul passenger and cargo flights out of Germany from 0600 GMT (2 a.m. EDT) to 2159 GMT (5.59 p.m. EDT) on Tuesday, while Wednesday’s 24-hour strike targets short-haul Lufthansa and Germanwings flights, it said on Monday.
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. It expects several hundred flights to be canceled on Wednesday, when it has 1,350 short-haul flights planned.
Lufthansa is trying to cut costs as it battles to maintain market share against budget rivals such as Ryanair (RYA.I).
Relations between management and the Vereinigung Cockpit (VC) union, which represents around 5,000 Lufthansa and Germanwings pilots, 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 (EZJ.L).
Announcing the Wednesday strike, union spokesman Markus Wahl said Lufthansa management had not shown any willingness to reach an agreement. Lufthansa had said earlier on Monday that it had offered talks over the weekend, but VC said the offer provided no basis for talks.
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 recalls his counterpart Willie Walsh’s stance with crew at British Airways and Iberia, where the cost cuts achieved helping parent group IAG (ICAG.L) to report stronger profits than Lufthansa or Air France-KLM (AIRF.PA).
However, analysts point out Walsh was negotiating during the financial crisis when oil prices were high, whereas Spohr has a tougher job amid low oil prices and rising passenger numbers.
IAG is aiming for an operating profit this year 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.
That target does not include the impact of strikes, which have cost Lufthansa around 100 million euros this year already.
Editing by Thomas Atkins and Mark Potter; Editing by Tom Heneghan