FRANKFURT—German pilot union Vereinigung Cockpit (VC) and Lufthansa affiliate Eurowings are resuming negotiations about a new collective bargaining agreement after a three-day strike ends Oct. 19, industry sources say.
VC had called its members at Eurowings on a strike that forced the airline to cancel around 200 or half of its daily services since the beginning of the week. The move was preceded by a one-day strike earlier in October.
Eurowings is operating the direct services part of Lufthansa Group’s German network, with the exception of hub feeding in Frankfurt and Munich. Its operating costs have been substantially lower than that of the mainline carrier, though also substantially higher than those of Wizz Air and Ryanair.
Eurowings succeeded Germanwings as the group’s defensive mechanism against the rise of LCCs in Lufthansa’s home market. While Ryanair, Wizz Air and easyjet have recently scaled back their capacity into the German market, the effort has come at a price for the group as Eurowings has been continuously loss-making.
The conflict with pilots is about work conditions, not pay. Some of the union demands: cutting weekly duty time from 55 to 50 hours; more guaranteed days off. Eurowings has said the demands are excessive and would make about 20% of its routes unviable.
However, Lufthansa Group earlier this week upped its guidance for the full year based on the strong travel demand. The company now expects to post an operating profit in excess of €1 billion ($984.7 million) for the full year, twice the amount it had targeted only three months ago. For the third quarter, the company’s adjusted operating profit more than quadrupled to €1.1 billion as revenues doubled and reached €10.1 billion. Net debt declined from 6.4 billion to 6.2 billion. The airline has also paid back all state aid with the government having exited as a minority shareholder.
The improved financial performance has not only led Eurowings pilots to claim better work conditions. Negotiations with flight attendant union UFO are also pending and UNO has already said that “where there is a lot, a lot can be distributed.” Mainline pilots were granted a €980 monthly pay increase to end strikes in September. VC and the airline agreed to enter talks about minimum fleet guarantees, outsourcing and scope clauses and have given themselves until June 2023 to sort out differences. A previous guarantee had terminated by management at the end of 2021, just before the sharp rebound of air travel in Europe.
Even with a resumption of talks between Eurowings and VC, a quick conflict resolution is not obvious. The union opted to go for maximum demands in this round of negotiations rather than adopting a step-by-step approach which caught management by surprise.
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