Lufthansa is having its fair share of labor relations issues at the moment. The airline has seen several strikes in recent weeks, from both ground workers and flight attendants, which have cost the airline an estimated $271 million so far. Even after the strikes, no progress has been made when it comes to negotiations (at least officially), so more strikes could be on the horizon.
That’s why I find the latest comments from the company’s CEO to be quite curious…
Lufthansa CEO confident strikes will end soon
Richard Quest of Quest Means Business just interviewed Lufthansa Group CEO Carsten Spohr about the status of the industrial action, and I can’t help but be a bit confused. Spohr is very confident that these issues will be resolved soon, but not necessarily for the reason you’d expect. While you can watch the interview for yourself below, let me hit on a few of the key points:
- “We have a unique situation of high inflation of the last years and full employment, and that combination I think Germany hasn’t seen in a long, long time, that’s why we indeed see a frequency of strikes in Germany we haven’t seen in a long, long time”
- “But when it comes to Lufthansa negotiations, I’m quite optimistic that we have seen the worst, and we are now coming to an end of this”
- When he’s asked why he’s optimistic about strikes coming to an end, he explains “Lufthansa being a group, we introduced a few years ago that every internal strike is allocated as cost to the labor group which goes on strike, so that has a discipline element attached to it, which in my view makes people understand that internal strikes eventually come to their own disadvantage”
- “I think our staff knows that strikes also are ruining their business model as individuals”, and “in our industry, customers become unhappy, customers choose other hubs”
Can someone help me make sense of this?
In the past I’ve made a list of airline CEOs that I respect most. I would never make a list of airline CEOs that I respect least, but if I did… well, I’ll let you use your imagination 😉
Now, I’m not saying anyone should care about my opinion, as Lufthansa Group has performed pretty well financially, but in terms of passenger experience and labor relations, I can’t say I’m impressed by the airline under Spohr’s leadership. The biggest passenger experience achievement under his leadership was “earning” a Skytrax 5-$tar rating, and even that was taken away.
But anyway, can we talk about his strike comments for a moment? Spohr is optimistic that the strikes won’t go on, because Lufthansa internally allocates the cost of a strike to a particular labor group. Is that the emptiest threat on earth, or what am I not understanding?
- Management and unions are far apart in terms of what they’re willing to settle for
- Typically after a strike, the two groups get closer together rather than farther apart when it comes to an agreement
- So is Spohr suggesting that after each strike, the total amount of value of the contract is decreasing, to the point that they get less than they would have even gotten before the strike?
- Is there any precedent for that at the airline? With the strikes having cost an estimated $271 million so far, does that mean that $271 million is being deducted from the initial amount being offered? If they keep going on strike, will they eventually have to pay for the privilege of working at Lufthansa?
- Or is this more of an idle threat of “oh, next time we negotiate a contract, we’ll remind you of how much your last strike cost us?”
It’s entirely possible I’m missing something, and if so, please let me know. But otherwise, that comment just reeks of arrogance, and shows that maybe Spohr shouldn’t be leading an airline group if he’s so unable to negotiate with employees.
I feel like maybe his focus should be on finding common ground with the unions and labor groups, rather than basically saying “meh, they’ll stop eventually, because we’re taking the money out of their pockets to pay for these strikes.” What’s sad is that Spohr is a former Lufthansa pilot, so you’d think he’d be better at labor relations…
Bottom line
Lufthansa’s CEO doesn’t seem very bothered by the current strikes, since he’s suggesting that the money lost from the strikes is coming out of the pockets of employees, and therefore he thinks they’ll end soon. To me that sounds like a totally empty threat — after all, that would suggest that the offer gets worse with each strike, rather than the two parties being closer to an agreement. But it’s possible I’m missing something.
What do you make of Spohr’s comments about the strike?
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