Lufthansa Cancels 930 Flights as Strike Hobbles German Carrier

FRANKFURT, Germany (Bloomberg) -
Lufthansa planes park at the airport in Duesseldorf, Germany, Monday. (AP Photo/Martin Meissner)
Lufthansa planes park at the airport in Duesseldorf, Germany, Monday. (AP Photo/Martin Meissner)

Deutsche Lufthansa canceled 930 flights scheduled for Wednesday at its three main German hubs as a record string of walkouts by cabin crews hobbles the airline.

Lufthansa dropped the flights even though a German labor court ruled late Tuesday in the airline’s favor regarding the legality of a strike in Dusseldorf, and another court was preparing to issue a decision on whether walkouts in Munich and Frankfurt could go ahead.

The airline said it was canceling flights at the three hubs for Wednesday, affecting 100,000 customers, due to the uncertainty of whether they’d be able to operate the connections. The UFO cabin crew union has called for three days of strikes through Friday and said it was considering lengthening the walkout, which began last week.

Labor leaders are battling against Lufthansa’s efforts to restructure to compete with low-cost rivals such as Ryanair and EasyJet, Europe’s two biggest discount carriers. The airline’s strategy hinges on development of its Eurowings division into a low-cost arm. Lufthansa’s latest offer to UFO included a one-time payment of 3,000 euros ($3,220) per employee and acceptance of the union’s demands on early retirement, but only for current workers, and the carrier said it will scale back flights, a proposal that UFO called a “provocation.”

“Employees seem to be angry, and the union seems well-organized, making it very hard for Lufthansa to mitigate the strike impact,” Jochen Rothenbacher, a Frankfurt-based analyst at Equinet, said by phone. “On the other hand, management clearly said they will not back down and are willing to shrink the main brand if costs won’t come down. So it seems the situation will get worse before it gets better.”

The ruling by a Dusseldorf court only covers crew at that site, with the second suit being heard by a court in Darmstadt Tuesday evening. The Dusseldorf order, which said the union hadn’t adequately specified its demands before calling the strike, can be appealed.

While the Dusseldorf ruling only covered Tuesday’s walkout, Lufthansa has asked the court to also block the union from continuing the strike in the coming days from that location. The tribunal has scheduled a hearing on the new bid Wednesday afternoon.

The airline has been seeking injunctions at two German labor courts to prevent more walkouts after stoppages for four of the past five days, and offering to resolve the dispute through arbitration. Lufthansa has already dropped 1,900 flights since the strikes began Nov. 6.

Lufthansa has declined to estimate how much the flight attendants’ strike has cost. Spending related to 12,800 cancellations over 18 months through September in a parallel dispute with pilots amounted to 352 million euros. Direct costs emerging from the cabin-crew stoppages will total about 100 million euros, if the protest is extended through Friday, and that doesn’t include lost revenue from customers who avoid booking with the airline in coming months, according to Ruxandra Haradau-Doeser, an analyst at Kepler Cheuvreux.

The shares closed down 1 percent at 13.39 euros in Frankfurt. The stock has dropped 3.2 percent this year, valuing the airline at 6.22 billion euros.

The airline is “aware of the burdens our passengers are currently bearing,” and that it’s “currently not able to offer premium services,” Chief Executive Officer Carsten Spohr said at a Berlin press conference before UFO announced its broader strike.

Walkouts by pilots ended when a German court ruled in September that the moves marked an illegal effort by the Vereinigung Cockpit union to fight corporate strategy in which labor doesn’t have a say.

Vereinigung Cockpit said separately on Tuesday that it’s filing an appeal at the Constitutional Court, Germany’s top court, over the September ruling. The strike that was halted wasn’t related to any issue outside of early retirement benefits, the union said.