Lufthansa announced yesterday that they’ve agreed in principal to the recommendations that came out of mediation sessions with Vereinigung Cockpit. Now it’s up to the Union to vote on the recommendations. The vote is expected to take place by late March.
In summary, here is what the deal looks like:
- Pilots will get a retroactive pay raise of 2% going back to January 1, 2016, and an additional 2.3% pay raise effective January 1, 2017.
- On January 1, 2018, an additional raise of 2.4% will be paid, and yet another raise of 2% on January 2019.
- A one-time ‘bonus’ will be paid that will amount to €5000-€6000 per pilot.
- The deal would be in effect until 2019.
Keep in mind this is only one part of the multi-faceted labor issue. The harder portion of reaching complete labor peace involves figuring out how pensions will be earned and paid. So we’re not quite out of the woods yet.
Lufthansa, though agreeing to the proposal, did come back with a response that suggested consequences are in the offing as a result of this deal. With the deal expected to cost Lufthansa at least €85 million annually, LH has suggested that it may use cabin crew on 40 aircraft that are not subject to the agreement. Most likely this would come from the pilots being ‘acquired’ through the Air Berlin deal that sees LH operating AB aircraft on their routes beginning this year. They are not subject to this agreement and would be one easy option to help mitigate at least some of the increase in labor cost.
Union representatives suggested that this deal may not be an easy one to sell to their members due to the issue revolving around the 40 aircraft that would have cockpit crew not covered by the agreement.
Also as part of the agreement and announcement, LH has indicated that no jobs will be impacted due to this arrangement.
Late last week, Lufthansa and Vereinigung Cockpit (VC) ‘quietly’ agreed to work towards an agreement that would finally put an end to strikes by Lufthansa pilots.
Over the last few months you’ve noticed relative peace between LH and VC as both sides have been negotiating on several levels to reach an agreement that would protect pilot benefits as well as the Airline’s interest. To that end, there have been several separate groups negotiation a variety of issues. Going forward, both sides agreed to consolidate their efforts into one major push and have committed to having issues resolved and new agreements in place by the end of July.
What does this mean?
As long as both sides agree to work together and not pull any surprises, I suspect that we will have little to no risk of service disruptions due to striking pilots this summer. Odds for a deal have improved dramatically once the union provided concessions to the compensation structure for pilots, while LH committed to expanded career opportunities for pilots.
The only time strikes would be called would be when the union had a temper tantrum and wanted to send a message to the airline and its passengers. It appears that they are well past this, and are finally realizing that the best outcome is to get a deal done.
Hopefully the peace lasts……
Early today in Frankfurt, a much awaited meeting took place between Lufthansa and the 3 main unions that cover most of their employees. Based on the comments coming from the meeting, there seems to be a genuine desire to find solutions but no firm outcomes came from the sessions.
Instead, all sides agreed that they need to improve trust and transparency amongst one another if long term labor peace is to be achieved. However that transparency does not involve the public as all sides decided that the contents of todays meeting are to be held in confidence. In addition, LH and the unions also agreed to keep the nature of future negotiations from the public as well.
As an optimist, these comments strike me as a desire by the airline and unions to keep their dirty laundry between themselves and not wage their battles in public. As part of this, they’ll try to restore trust that may have been lost between the airline and labor. Their comment about keeping their battles out of the public’s eye suggest to me that strikes would not be used as a weapon, but I may be TOO optimistic to go that far.
However as a pessimist, I do not get a positive ‘vibe’ after today’s meeting that anything has truly been accomplished. I continue to get the impression both sides have serious impasses to overcome and are not really certain how to do it, nor is anyone prepared to give up any ground in the process which means we can expect more of the same behaviors going forward.
Insanity is defined by the concept of doing the same thing over and over, expecting a different result from the process.
I can’t think of a better way to sum things up when it comes to how things are going between LH and the unions.
There is however on small bit of silver lining…..
Late last week, LH and Ver.di, who represents 30,000 LH employees who are not cabin crew or pilots, reached a deal that would enhance pension benefits and provide for pay increases over the next 2 years. As part of the deal, members will also get a one time payment of up to €2250 this year. This new contract will be in force until December 2017.
Earlier today in Germany, the union representing Lufthansa’s pilots has announced that recent mediation efforts have failed. Talks have broken down to such an extent that the union has threatened to strike despite its earlier commitment to not strike at least until the end of July while giving mediation efforts a chance to work.
The union has stated that no strike has yet been scheduled because it will be up to their committees to determine the exact timing and target of the strikes. I suspect that the first strikes can come as early as this week based on their posturing.
In the past, the union has usually given at least 24 hours warning prior to any work stoppage. Should a strike impact your travels, you will be able to easily rebook your tickets through LH, or request a refund of your fare.
The union representing the majority of Lufthansa’s pilots has broken off talks with the airline after failing to reach an agreement in a long-standing labor dispute.
As a result, the union has once again threatened work stoppages that could come at anytime but they did indicate that there will be no strikes during the Christmas Holiday.
The talks have broken off even after Lufthansa offered pilots a 5% pay raise. However the major sticking point revolves around early retirement. The union wants LH to let pilots retire as early as age 55 with a majority of their benefits intact while Lufthansa’s position has remained that the minimum retirement age should be somewhere ‘north’ of 55 for a pilot to earn full retirement benefits.
With these new threats, strikes can be called with as little as 24-48 hours notice and can include pilots from Cargo, Lufthansa and Germanwings. Fortunately (or unfortunately), Lufthansa has become quite adept at handling these strikes and has been proactive in assisting passengers during work stoppages.
I’m sure we’ll hear more in the next few days.