Germanwings Cancels Flights as Pilots Strike Over Cost Cuts

Aug 29, 2014 3:27 am ET

(Updates with latest on strike beginning in first paragraph.)

Aug. 29 (Bloomberg) -- Deutsche Lufthansa AG’s discount unit Germanwings canceled 70 percent of flights after pilots started a six-hour strike over cost-cut measures.

About 15,000 passengers are being impacted by the grounding of 116 of 164 flights scheduled for this morning, Vanessa Torres, an airline spokeswoman, said in a phone interview. The Vereinigung Cockpit union is striking from 6 a.m. until 12 p.m. local time.

The walkout comes days after Lufthansa said it’s trying to avert a fresh strikes by pilots at the namesake airline. The carrier canceled 3,800 flights over three days in April after pilots walked out in the worst strike in the airline’s history. Lufthansa in June cut its forecasts for this year and next as pilots resisted cost cuts and a capacity splurge hurts prices.

“We are very disappointed that we cannot avert the strike,” Bettina Volkens, Lufthansa’s head of personnel, said in a statement yesterday. “We will do everything possible to provide Germanwings passengers with assistance.”

Afternoon flights will also be affected by the walkout, with the airline aiming to return to a normal schedule later in the day, Torres said.

Lufthansa is transferring non-hub European traffic to Germanwings, a key part of a groupwide push to lift operating profit to 2.65 billion euros ($3.5 billion) by next year. The company said in May that it’s planning to change the legal form of operations in eight German cities, which together employ 1,500 people, and move them into its Lufthansa Commercial Holding, the umbrella for about 400 subsidiaries.

Early Retirement

At the airline’s main unit, the key point of concern revolves around bridge payments to pilots who traditionally retired as early as age 55, a remnant from past accords that Lufthansa says no longer represents the current status quo. Both sides have resumed negotiations, which Lufthansa said is a positive signal that a walkout may be averted.

Air France’s SNPL pilots union is also considering a strike next month. Air France-KLM Group saw a rise in second-quarter profit as it benefited from cost cuts, and announced another five-year plan to drive down expenses.

“We want a new strategy and we want to participate in the discussion,” Jean-Louis Barber, SNPL union president, said at a press conference in Paris. The Air France walkout, which would take place between Sept. 15 and Sept. 22, is in support of a single contract for Air France pilots, including those at the carrier’s low-cost Transavia and Hop! units.

--With assistance from Kari Lundgren in London.