Lufthansa has faced ongoing challenges with labor relations, resulting in significant costs for the airline. Over the years, we have witnessed a series of strikes at the airline, often leading to management appearing to be the loser. It’s astonishing how the airline’s executives repeatedly make the same errors, anticipating different outcomes.
Ironically, Lufthansa Group CEO Carsten Spohr, a former pilot, might be expected to advocate for labor. However, upon transitioning to management, he seems to exhibit a degree of disregard for the employees who sustain the airline (at least that’s what his actions suggest).
Could it be that Lufthansa is finally ready to change its approach? Management appears to imply such, but only time will reveal whether this is mere rhetoric or if there is substantial action behind it.
Lufthansa aims to collaborate with labor on sustainable solutions.
This marks Lufthansa’s 100th anniversary, which should be a year of festivities. Instead, this spring, employees organized a series of consecutive strikes, as both pilots and flight attendants conducted industrial actions that halted airline operations for approximately a week, costing the company hundreds of millions. This disruption also resulted in the abrupt closure of Lufthansa’s CityLine subsidiary.
Although formal strikes have not occurred since then, contract discussions are still in progress, leaving the door open for further industrial actions. However, for the first time in my memory, it seems that Lufthansa management is genuinely recognizing the need to adjust its stance towards labor.
In addressing labor relations at the carrier, Lufthansa’s Chief Human Resources Officer, Michael Niggemann, remarked, “we need to resume talking with each other rather than about each other.” He further emphasized that “it’s vital that we not only address the ongoing collective bargaining disputes but also establish a strong foundation for cooperation in the upcoming years.”
Those are indeed the right sentiments; now, we must see if any actions follow. More concretely, it appears that both parties have come to an agreement on a framework to arbitrate labor conflicts, with the union representing pilots notifying members that negotiations will aim to achieve resolutions instead of resorting to industrial action.
In general, Lufthansa’s labor relations struggles have stemmed from a lack of goodwill and collaboration between management and unions.
Despite being the “flagship” airline, Lufthansa has the lowest profit margins within Lufthansa Group. The interpretation of that can vary based on viewpoint:
– Management contends that persistent lack of profitability necessitates creating new airline subsidiaries, claiming that labor contracts for Lufthansa are excessively costly.
– Labor unions argue that Lufthansa’s status as the least profitable airline is a direct result of the airline group’s outsourcing tendencies, leaving the remaining operations significantly undervalued, as the flagship brand is being “sacrificed.”
Lufthansa’s 100th anniversary hasn’t been favorable for labor.
Air France-KLM is supposedly responsible for Lufthansa’s new direction.
What has prompted Lufthansa to adopt a different strategy regarding labor relations? Logically, one might assume that management recognizes the benefits of maintaining positive relationships with employees. However, the situation is likely not so simple. I believe Lufthansa Group management is becoming aware that amidst the increasing consolidation of European airlines, achieving labor peace is a key differentiator.
I think a significant influence on Lufthansa Group comes from Ben Smith at Air France-KLM. Before 2018, labor relationships at Air France were notoriously poor. A protest in 2015 resembled a violent uprising, with executives facing physical confrontations as they attempted to escape distressing situations.
Since Smith’s arrival in 2018, however, the narrative has shifted dramatically for Air France; the airline has not encountered a single major instance of industrial action since then. Eight years without significant unrest is quite extraordinary.
It’s common for those critical of unions to attribute unrest to them while exonerating management. Yes, unions can pose challenges. Yet the contrast with Air France exemplifies that. Air France has transformed from the worst to the best in labor relations across Europe—how is that achievable?
Smith possesses profound respect for employees, he is a dedicated aviation enthusiast (which employees appreciate), and he fundamentally perceives labor and management as partners rather than adversaries. He grasps the importance of strategic investments in employee satisfaction.
For instance, one of his initial actions in his role was to dissolve the low-cost carrier Joon, transitioning those employees to more lucrative contracts. This approach stands in stark contrast to that of Lufthansa Group, which has focused on establishing new subsidiaries to reduce labor costs, at the expense of