Lufthansa strike leaves thousands stranded

A strike by Lufthansa's pilots in Germany over job security has grounded hundreds of flights, causing travel chaos and leaving thousands of passengers around the world stranded.

Some 4000 German pilots began a four-day stoppage on concerns the company could try to cut staff costs by shifting jobs to foreign subsidiaries such as Austrian Airlines (AUA) or Lufthansa Italia, where wages are lower.

The German flagship carrier wants to cut 1 billion euros (NZ$1.94b) of costs by 2011 while expanding abroad to compete with low-cost carriers and Asian rivals.

Last September Lufthansa completed a shopping spree that saw it add Brussels Airlines, Austrian Airlines and BMI to its stable, while also starting up its own airline in Italy, called Lufthansa Italia.

The Lufthansa showdown came as rival British Airways (BA) braced for the results of a new strike ballot among cabin staff who were forced by a UK court to abandon plans for a 12-day work stoppage over Christmas.

If a BA strike, over cost-cutting plans, goes ahead in Europe's second-biggest economy European travellers could face additional travel turmoil.

Lufthansa expects the strike will cost it about 100 million euros (NZ$194m), in addition to lost ticket sales and possible damage to its reputation as it grounds about 800 out of 1800 flights per day over the four-day period.

It has asked a court to issue a temporary injunction to stop the strike and a hearing is scheduled for 4:30pm British time on Monday (5.30am Tuesday NZT), a spokesman for the Frankfurt labour court said.

One of the concerns raised by Lufthansa employees is to do with pay. The starting salary for a first officer in a Lufthansa cockpit is 62,000 euros (NZ$120,266), for a captain 115,000 euros (NZ$223,000), according to the company's recruiting website. Media reports put the top end of pilots' salaries at about 325,000 euros (NZ$630,000).

"As we have been saying last week, those pilots want to be treated like managers but are acting like underpaid bus drivers," said a local trader.

Airlines are reeling from the aviation industry's worst year ever, in which demand dropped faster than capacity could be cut. The International Air Transport Association (IATA) has said that 2010 could be tough as well.

Passengers stranded by the Lufthansa strike are being rebooked on other airlines or having to take trains for domestic travel after last-ditch attempts to reach a compromise failed over the weekend.

"We would just like to get home after such a long flight," said Brawn van Mulheim, a Lufthansa passenger stalled in Munich on his way from New York to Brussels.

STALEMATE

Lufthansa's pilots have offered to forego pay increases if in return they get some control over which routes or pilot jobs are transferred to other group airlines. Lufthansa has rejected that demand, saying it would require ceding control over parts of business strategy to its workers and the union.

Fears of unemployment are spreading to other sectors of the German economy and workers are looking to employers for job security in exchange for pay concessions like carmaker Volkswagen has done.

Engineering sector workers have also accepted moderate wage increases to help secure jobs.

Other airlines, rail operators and rental car companies, meanwhile, stand to benefit from the Lufthansa strike.

- Reuters