Lufthansa’s Summer Blues Deepen as Cabin Crew Vote on Strikes
Lufthansa’s Summer Blues Deepen as Cabin Crew Vote on Strikes
(Bloomberg) -- Deutsche Lufthansa AG faces potential strikes during the busy summer travel season, adding a fresh headache for the German carrier just days after a profit warning sent the stock plunging.
The UFO cabin-crew union will hold ballots on walkouts at Lufthansa’s Eurowings and Germanwings units after pay talks broke down amid a push for cost cuts, union officials said at a press conference in Frankfurt on Thursday. Strikes could start in July and be widened to include walkouts at the main Lufthansa airline.
“Another summer of chaos looms if the company doesn’t change its approach,” union leader Sylvia De La Cruz said in Frankfurt.
Industrial action at Eurowings would add to a list of problems facing Lufthansa. The airline’s shares slumped the most in three years on Monday after the company said it fears a European fare war will squeeze profits at least for the rest of the year, leading to a string of analyst downgrades.
Lufthansa shares were down 0.4% at 10:55 a.m. in Frankfurt trading. The stock has tumbled 24% this year.
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Lufthansa expects sales at Eurowings to fall this year and plans new cost-cutting measures at the unit, which Chief Executive Officer Carsten Spohr is trying to position as a rival to budget carriers Ryanair Holdings Plc and EasyJet Plc. The worsening performance at Eurowings comes months after Lufthansa said it would halt expansion of the airline amid a capacity glut.
Management has been in talks with unions on a new pay deal for more than a year. The Eurowings and Germanwings units have about 900 and about 1300 flight attendants, respectively.
“Lufthansa has managed to knowingly escalate its pay conflicts with union members, against all logic and shareholder interest,” UFO leader Daniel Flohr said.
To contact the reporter on this story: William Wilkes in Frankfurt at wwilkes1@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Chris Reiter, Iain Rogers
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