Lufthansa inks “short-term” cost-cutting deal with pilots

Lufthansa (LH, Frankfurt Int’l) concluded a “short-term agreement” with pilots on August 19 on a package of “initial” cost-cutting measures in return for job guarantees until at least March 31, 2021, the carrier outlined in a statement. Pilots union Vereinigung Cockpit (VC) agreed to reduced top-up payments to short-time work benefits and cuts to pension benefits from September until the end of 2020. Collective wage increases negotiated for 2020 will be postponed until January 2021. The measures apply to pilots at Lufthansa, Lufthansa Cargo, and Lufthansa Aviation Training, as well as some germanwings pilots. Lufthansa pledged that for all German flight operations it would refrain from hiring new pilots from outside the company as long as there is an overcapacity of cockpit staff. This also applies to leisure specialist SunExpress Deutschland and to the German base of Brussels Airlines at Düsseldorf Int’l. However, Lufthansa stressed that avoiding redundancies beyond March would be possible only with a long-term agreement for its 5,000 pilots, including cuts in working hours and salaries. “The significant overcapacity of pilots will last considerably beyond March 2021. The number of redundancies for operational reasons can therefore only be limited by concluding a long-term crisis agreement [in which] the costs of the personnel surplus could, for example, be compensated for by a corresponding reduction in working hours and salary for the period of the crisis,” the airline said. VC commented in its own statement that the period covered in the short-term deal will give the two sides time to work on a longer-term agreement. “We clearly reject Lufthansa’s threat to make redundancies for operational reasons. In our opinion, a social partnership must show how resilient it is, especially in bad times,” its president, Markus Wahl, said in a statement, adding: “The pilots are ready to make a noticeable contribution to keep the entire cockpit staff on board.” Last week, after losing EUR1.7 billion euros (USD2 billion) in a single quarter, Lufthansa put its employees on notice of compulsory layoffs. In June, it received a EUR9 billion (USD10.6 billion) government bailout.