We will not risk long-term growth for short-term harmony: Lufthansa finance chief

Deutsche Lufthansa AG would remain firm in union negotiations amid growing global competition, the German airline’s finance chief, Simone Menne, said.

“We are ready for new strikes, if necessary also by the pilots, in pursuit of our long-term goals,” Menne said Monday in New York.

A union leader last week warned that Lufthansa faced more service disruptions just as flights had begun to return to normal after earlier warning strikes.

Lufthansa is implementing a savings programme aimed at reducing the airline’s employees by 3,500. The company is also demanding longer work days and no pay raises as a contribution from employees to the current austerity plans.

“We will not risk our long-term growth in exchange for short-term harmony,” Menne said, adding that Lufthansa needs more flexibility.

In many markets, it is not possible to operate at a profit given current ticket prices, she said.

“It’s a crazy industry,” she said.

The Verdi union last week targeted the Frankfurt airport, Germany’s busiest, with warning strikes, forcing the Cologne-based carrier to cancel about 700 flights across Germany after about 6,000 staff walked off their jobs over pay negotiations.

Negotiations include 33,000 employees, especially those in the technical and service branches. Verdi union chief Frank Bsirske warned that Lufthansa workers would continue their industrial action in support of demands for a 5.2-per-cent increase in wages as well as better job security and improved conditions for trainees.

Menne could not put a price on the cost of last week’s strikes.

During a three-day strike of cabin attendants in 2012, the company lost 33 million euros ($42.5 million), she said.

Lufthansa is in the middle of one of its largest austerity and reorganisation programmes in history, which it said is aimed at boosting profits and securing a more solid foundation against stiff international competition.

The Lufthansa board is considering new catering arrangements, now provided by its subsidiary LSG Sky Chefs, Menne said. At the same time, Lufthansa does not want to lose control of that branch.

One of the toughest challenges is in South Asia, where rivals from the Gulf region, such as Emirates, are providing stiff competition, she said. For that reason, Lufthansa is withdrawing from bases in Hyderabad and Kolkata, Menne indicated.

“We are looking at all strategic options,” Menne said. That would include partnerships, cooperative enterprise and other strategies, she said.

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