Cabin crew unions at Eurowings, a low-cost subdivision of Lufthansa, will soon vote on whether to strike this summer. A vote to strike could spread to Lufthansa mainline cabin crews.
Talks broke down this week after Lufthansa approached the union seeking cost cuts. Its Eurowings division has been a loss-leaders and expansion after the collapse of Air Berlin has not resulted in the revenue nor the profit projected. Hoping to stem the loss, Lufthansa is reevaluating its entire Eurowings strategy and cutting growth.
Speaking after the collapse of negotiations, a union leader told Bloomberg:
Another summer of chaos looms if the company doesn’t change its approach.
Last year, problems airport security checkpoints, particularly in Frankfurt, caused a summer of chaos. Security screeners could not keep up with the massive traffic passing through the airport, causing multi-hour lines and stranding many passengers. Those issues have not been fully resolved and a cabin strike would only exacerbate the issue. A summer of chaos indeed…
A union leader further added:
Lufthansa has managed to knowingly escalate its pay conflicts with union members, against all logic and shareholder interest.
While there is no question Lufthansa has managed to escalate conflict with its union members, I’m not sure there is no logic or shareholder interest behind it, considering what a disappointment Eurowings has been to the Lufthansa Group.
Eurowings and Germanwings are still technically separate units (though all now operate under the Eurowings banner). This dispute directly involves 900 Eurowings flight attendants and 1300 flight attendants from Germanwings. But since flight attendants within Lufthansa have acted in solidarity before, a cabin strike by Eurowings could spread to Lufthansa mainline as well.
CONCLUSION
For now, mark this story as developing. The union must tread carefully because a strike may well be met with permanent route slashings and a reduction in workforce. Under German law, that cannot be done in retaliation but can be done as a necessary “re-structure” of a company. Lufthansa has some wiggle room…but must tread carefully.
image: Eurowings
I would say that the piecemeal expansion of German/Eurowings by Lufthansa has been a mistake and in particular the movement of all routes that do not touch Frankfurt and Munich to German/Eurowings was foolish.
Many of those routes had a high level of premium traffic on them e.g. TXL-LHR, DUS-LHR, TXL-CDG, DUS-MAD and so on and while there is notionally a premium offering on German/Eurowings it isn’t very good. The consequence of that has been that premium traffic has moved to AF, BA and so on and essentially Lufthansa have lost their premium traffic share on those routes.
Equally at the German outstations which are now predominantly German/Eurowings stations the Lufthansa product has been diminished with a reduction in premium check in facilities and so on.
Equally the Germanwings or Eurowings branding is confused. Are they the same or different? IIRC Eurowings was set up because the costs of Germanwings were too high but then after the tragic Germanwings accident everything started to operate under the Eurowings banner but most of the planes are still painted in Germanwings livery. In terms of the crews, while they are decent people the bar is obviously set much lower than it is for LH mainline even in terms of appearance.
Then the demise of Air Berlin didn’t do what Lufthansa expected. Air Berlin was never a strong competitor and certainly on short haul flights the fares were very similar to those of Lufthansa. They are gone and Easyjet is the replacement and Easyjet are a whole different story. Competition is strong, the service and product are better and the fares are lower, if you are buying on price that’s where you will go so Lufthansa lose again.
There might be a role for German/Eurowings but certainly only one brand or the other. If there is, Lufthansa need to pick the routes very carefully and be sure that they would not be better operated by mainline or indeed Cityline – lower cost in Lufthansa livery with identical on board service. On short haul they also need to compete on price with their full service competitors rather than be a lot more expensive unless you are on a corporate deal. I was on LHR-MUC last week and I was the only person in five rows of business class and economy was far from full while on BA the planes tend to be packed. Lufthansa seem to be missing a trick, reduce prices slightly and fill the planes or at least don’t charge 75% more than BA do on the same routes for essentially the same service.