economics

March 15, 2010

Lufthansa Strike Halted but European Airline Unions Flex Muscle

Filed under: Uncategorized — ktetaichinh @ 9:04 pm
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y DANIEL MICHAELS, KAVERI NITHTHYANANTHAN And JAN HROMADKO

European airlines’ effort to restructure their troubled industry are hitting resistance from labor unions after years of cutbacks.

Pilots at Germany’s Deutsche Lufthansa AG started a four-day walkout that grounded hundreds of flights Monday before agreeing in a court hearing to suspend their action, while cabin staff at British Airways PLC voted to strike, although didn’t set a date.

Both moves come as airlines world-wide are struggling to overcome their deepest crisis in years by pushing staff, suppliers and passengers to accept less. In France, air traffic controllers ā€“ who are under pressure to increase efficiency and cut costs from airlines that pay air-control fees ā€“ announced a three-day strike affecting airports in Paris. Unions representing the controllers on Monday called the strike to protest a plan for a more integrated European air-traffic control system that they say could cost jobs.

Flight Disruptions as Lufthansa Pilots Strike

2:14Lufthansa pilots began a four-day strike Monday after failing to agree with management over wages and job security. Many passengers are stranded at airports as about two-thirds of the German carrier’s flights were cancelled.

Franco-Dutch carrier Air France-KLM SA said it would cancel large numbers of short- and medium-haul flights as a result.

BA’s cabin staff are also protesting moves to boost efficiency. Unite, the labor union representing the employees, said that just under 80% of BA cabin crew voted in the ballot, and of those, some 81% supported industrial action. Unite said it didn’t announce a strike date because the airline and workers are still negotiating.

Many staff are upset that BA last year changed working procedures. Unite took BA to Britain’s High Court over the issue, arguing the changes breached crew members’ contracts. The court last week ruled in BA’s favor.

AFP/Getty ImagesLufthansa pilots take part in a strike at Frankfurt airport.

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BA said in a statement Monday that it was disappointed by the strike vote, noting that much of the balloting was concluded before the court decision was announced. The company said it hoped to resolve the issue through talks but said it would “not allow Unite to ruin this company.”

The vote followed a similar strike ballot late last year, which BA successfully challenged in the High Court. The backing Unite announced Monday was down from 92.5% support garnered by the first vote. BA has discouraged some staff from striking by threatening to withdraw subsidized travel for those that don’t turn up for work.

Unite could decide as soon as today the terms of a potential strike.

In Germany, Lufthansa won an agreement to suspend the largest strike by its pilots in the airline’s history. The labor action, part of a long-running dispute over pay and job security, caused the cancellation of hundreds of flights Monday and disrupted the travel plans of thousands of passengers.

A Reprieve for Passengers

Hannelore Foerster/BloombergThomas von Sturm, spokesman for the wage subcommittee of the pilots’ union, addressed striking Lufthansa pilots at Rhein-Main airport Monday in Frankfurt, Germany.

Lufthansa, which is relatively healthy and has recently snapped up several weaker rivals, faces anger from pilot union Vereinigung Cockpit, which says management is trying to undercut pilots by shifting work to lower-cost subsidiaries of the mother company.

“The issue is, we have a contract with Lufthansa and they just don’t like our contract,” said Cockpit spokesman Joerg Handwerg, a Lufthansa pilot.

Lufthansa on Monday filed a request for a temporary injunction against the pilot strike because the strike was “disproportionate.” Lufthansa said last week it was examining the legality of the strike, which it said could cost it around ā‚¬25 million ($34 million) a day.

In a Frankfurt court, the two side agreed to resume negotiations immediately and the pilots suspended their strike until March 8. Lufthansa said its flight schedule would remain disrupted until the end of the week because of Monday’s action.

Write to Daniel Michaels at daniel.michaels@wsj.com, Kaveri Niththyananthan at kaveri.niththyananthan@dowjones.com and Jan Hromadko at jan.hromadko@dowjones.com

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