Lufthansa’s Eurowings Arm Faces Strike Over Lower Cabin Crew Pay

(Bloomberg) -- Deutsche Lufthansa AG may face more disruption to flights that have been beset by strikes over the past 2 1/2 years as a union representing cabin crew at the carrier’s low-cost arm weighs industrial action.

The Ver.di labor group said it could call a walkout at the Eurowings unit after four rounds of talks failed to produce a pay deal. Germany’s largest service union has previously left bargaining to the specialist UFO group, but says terms agreed at the main Lufthansa brand were too favorable to management.

“Our colleagues feel like they’re being blackmailed,” Ver.di official Huelya Gruenefeld said. “They have not had a raise in eight years, and they don’t want us to sign off on a deal brokered by UFO.” Eurowings crew get basic pay of 1,604 euros ($1,802) a month, 131 euros above Germany’s minimum wage.

A walkout by Ver.di members would open up a new front in Lufthansa’s long-running clash with unions over its efforts to cut costs. Strikes by pilots, ground staff and UFO flight attendants wiped a total of 463 million euros from the group’s operating profit in 2014 and 2015.

Ryanair Benchmark

Ver.di is seeking a 7 percent pay increase for the 461 crew stationed at the main Dusseldorf and Hamburg bases of Eurowings, rejecting Lufthansa’s efforts to benchmark the unit’s pay against rival discount operators such Ryanair Holdings Plc., where seat occupancy is more than 10 percentage points higher.

The company has offered a 1.3 percent raise for 2017 and 2018, conditional upon Ver.di and UFO synchronizing labor agreements, which German labor law requires them to do.

Ver.di’s board has given the go-ahead for an initial warning strike that could be called at “short notice” and last four hours, Gruenefeld said. A fifth round of talks is set for Sept. 26. UFO said it, too, could call a strike at Eurowings if a new deal isn’t secured before existing contracts expire on Sept. 30.

Eurowings spokesman Matthias Eberle said the company doesn’t comment on pay negotiations.