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Germany’s Lufthansa values cost of strikes at €250 million

Lufthansa’s CFO has said strikes have had long-term impacts on the company’s operations. The airline had recorded bumper profits in 2023.

Lufthansa, Germany’s flagship airline, estimated that industrial action by its staff this year cost the company €250 million ($272 million). 

Chief Financial Officer Remco Steenbergen shared the figure in an internal memo on Wednesday, saying that the impact of the strikes lasted longer than the strikes themselves.

The €250 million figure was more than double the estimated cost Steenbergen gave when presenting the company’s balance sheet at the beginning of March.

Long-term impacts of strikes

In the internal memo, the CFO cited problems organizing crew rosters, scheduling flights and general customer uncertainty.

One impact of the various strikes had been to cancel the normally profitable connection between Lufthansa’s main hub in Frankfurt and San Francisco for a week.

Steenbergen said customers had become reluctant to book with Lufthansa, and when they did, they avoided Frankfurt and Munich airports, which were the worst hit by the strikes. The company’s cargo services were impacted.

“Nobody can just recuperate around €250 million,” Lufthansa’s financial boss said, however, 2024 could still be a profitable year if deals are reached with the unions and the flight schedules can remain stable from April, he added.

Lufthansa recently announced bumper profits for 2023, doubling its earnings for the previous year and making it one of the company’s three best years, according to CEO Carsten Spohr.

Negotiations with unions ongoing

Cabin crew, ground staff and security personnel at airports have all been involved in labor disputes with the airline.

Negotiations are ongoing and Lufthansa hopes to find a solution before the beginning of the Easter break.

“There is a problem with money and [contract] duration,” Joachim Vazquez Bürger, chairman of the flight attendants’ union Ufo, said following the latest round of negotiations on Wednesday.

He added that talks would continue, “but whether there will be an agreement before Easter is currently not foreseeable.”

The Verdi union is representing both ground staff and airport security staff. Arbitrators are currently working to solve the wage dispute involving ground staff, but Verdi said it would call for indefinite strikes if those talks collapse.

Verdi representatives joined a sixth round of collective bargaining negotiations with employers on Wednesday on behalf of airport security staff.

“We are very willing to reach an agreement,” Verdi negotiator Wolfgang Pieper said before the talks began.

Source: Dw

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