Need I say Moores

Don’t hold your breath…

Lufthansa pilots’ union Vereinigung Cockpit (VC) has said that their current strike is “a question of who can hold their breath the longest and our breath is very long.”

That statement is far from reassuring as the strike enters its sixth day, causing a total of 4,461 flight cancelations and disrupting the journeys of 525,000 passengers.

VC board member Jörg Handwerg told me that the dispute is “about power.” He said management are using fear and pressure and the union is not willing to accept this style of leadership. But forcing the airline to bleed around €10 million ($10.6 million) per day until management agree to a 22% pay increase is hardly a gentle approach either. When companies and their staff are at war, everyone suffers.

Handwerg knows the strike is hurting the airline, but he doesn’t believe it could ultimately cause Lufthansa’s downfall. “We don’t think that is a real danger. It is a ghost that they want to put in our heads. When we stop striking, passengers come back quickly.”

However, just as the strike is about power rather than a simple pay deal, passenger loyalty is not just about the price and product. Uncertainty over whether the flight will actually operate is a real turn-off for passengers.

It is understandable that the union wants a share of Lufthansa’s record profits. It is also true that Europe’s network airlines have already demanded huge sacrifices from their staff and they keep asking for more.

Equally, over the last nine months Lufthansa’s unit revenues have fallen 5.8%, while its costs narrowed by only 2.1%. That gap is what keeps the airline in business.

In a cyclical industry, which is being temporarily boosted by low fuel prices, structural change is needed. Competitive efficiency is a necessity, not a luxury. Lufthansa is not competing with Air France or British Airways (BA), it is competing with every airline that touches its network. That is the nature of a global business.

Passengers will choose the best-priced, highest-quality and most reliable product. They don’t care much for company politics, or who has the greater lung capacity.

Victoria Moores, victoria.moores@penton.com

 

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