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Lufthansa to take legal action against Vereinigung Cockpit’s Group Collective Labor Agreement Committee

Lufthansa (Frankfurt) has issued this statement concerning the on-going strikes by the VC pilots union:

Lufthansa logo-2

The response from the Vereinigung Cockpit pilots’ union to the numerous proposals and offers of talks submitted by Lufthansa has been further strike action, which today is affecting long-haul services and tomorrow will affect all the company’s short- and medium-haul routes, and thereby again subject its customers to unacceptable inconvenience.

For the past two years, right up until yesterday, Lufthansa has been approaching the Vereinigung Cockpit (VC) Group Collective Labor Agreement Committee with constructive proposals, offers and concessions. In doing so, the company has made concrete proposals on every open collective labor agreement issue, with a view to working together with the VC to jointly ensure the future viability and competitiveness of the company as a whole and of Lufthansa German Airlines in particular. In addition, Lufthansa has also demonstrated a willingness to discuss issues with the VC Group Collective Labor Agreement Committee that extend far beyond the latter’s responsibility and authority.

Since it is evidently impossible at present to engage in constructive negotiations, Lufthansa has now resolved that:

  1. The existing rights and benefits held by the cockpit personnel already at the company under their present Group Collective Labor Agreements (CLAs) will be frozen at their current levels until such time as any new Group CLA is concluded. In view of the company’s current inability to compete, however, no more new pilots will be employed under these Group CLA conditions at Lufthansa German Airlines, Lufthansa Cargo or Germanwings. As a result, the natural employee turnover within the present cockpit corps will lead to gradual reductions in these companies’ aircraft fleets. At the same time, every present cockpit crew member at these companies will retain their position.
  2. Any future discussions with the VC Group Collective Labor Agreement Committee will be limited to those issues within its responsibility and authority. These are in particular the Compensation CLA, the Umbrella CLA, the CLA on Transfers and Promotions, the CLA on Old Age Provisions, the CLA on Employee Representation and the CLA on Transitional Retirement Provisions.
  3. Lufthansa will carefully consider whether all the agreements between the company and the VC Group Collective Labor Agreement Committee on which notice has not yet been served can be meaningfully maintained.
  4. Lufthansa will submit a claim for compensatory damages against the Vereinigung Cockpit to the Frankfurt Labor Court. This claim will be based on the unlawfulness of the pilots’ strike of April 2014, when the Vereinigung Cockpit ordered strike action against Lufthansa Cargo even though the corresponding CLA was still in force. The damage caused to the Lufthansa Group as a result of the April 2014 strike totaled around EUR 60 million.
  5. Lufthansa is considering what possibilities (if any) the German Collective Bargaining Act (“Tarifeinheitsgesetz”) offers to prevent further harm to the company and its customers. In taking these actions Lufthansa is assuming responsibility for the future competitiveness and viability of the entire company, for its customers (who are currently being subjected to unacceptable inconvenience) and for its 120,000 employees from all personnel groups whose jobs are directly dependent on the company’s future.

“We would have liked to finally resume our CLA negotiations with the Vereinigung Cockpit instead of having to respond with this further escalation,” says Bettina Volkens, Chief Officer Corporate Human Resources & Legal Affairs at Deutsche Lufthansa AG. “I also appeal to our pilots to live up to their personal responsibilities. With the strike plans outlined by the VC for the time between now and the end of this year, the financial damage to our company would exceed 100,000 euros per pilot. It is high time we sat down and found a solution here.”

Deutsche Lufthansa AG

Lufthansa later issued this statement after the court declared the strikes as illegal:

Lufthansa welcomes the decision of the Hessen Labor Court in Frankfurt am Main to prohibit the strike action by the Vereinigung Cockpit (VC) pilots’ union with immediate effect.

The Court described the VC’s strike action as “evidently unlawful” in that, for the VC, the strike was clearly motivated not only by the official reason stated, i.e. pilots’ transitional retirement provisions, but also by the Wings Concept of the Lufthansa Group. This was not, the Court found, a valid strike objective. The Court further noted that the VC was not prepared to enter into overall mediation unless the Wings Concept was included therein.

The Court’s ruling does not permit recourse to any further legal channels. Lufthansa will offer its customers flight schedules that are virtually back to normal from tomorrow onwards, together with its usual reliable service. For planning certainty reasons, today’s special timetable will remain in effect.

Lufthansa remains willing to resume its negotiations on all open collective labor agreement items with the VC’s Group Collective Labor Agreement Committee at any time.

“Our goal is still to work with the VC to find a joint solution to all the open CLA issues through the negotiating process,” confirms Dr. Bettina Volkens, Chief Officer Corporate Human Resources of Deutsche Lufthansa AG. Deutsche Lufthansa AG

Copyright Photo: Brian McDonough/AirlinersGallery.com. Boeing 747-830 D-ABYT (msn 37844) in the 1968 retro livery approaches the runway at Dulles International Airport near Washington.

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Lufthansa to operate around one half of its long-haul flights today due to the pilots’ strike

Lufthansa (Frankfurt) has issued this statement:

Lufthansa logo-2

Lufthansa has published a special timetable for its services for Tuesday, September 8.

The action has been taken following a call by the Vereinigung Cockpit pilots’ union (VC) for its members at Lufthansa German Airlines and Lufthansa Cargo to take strike action.

A total of 1,500 passenger flights (including some 170 long-haul services) and seven cargo flights were scheduled to be operated during the planned strike period today.

With a relatively large number of cockpit personnel indicating their willingness to fly, the airline will be able to operate more than half of its intercontinental passenger services despite the VC’s strike call.

All in all, 84 long-haul services from or to Frankfurt, Munich or Düsseldorf will have to be cancelled, while 90 such flights can be operated.

The willingness of many pilots to work despite the strike call will also permit all seven scheduled cargo flights for Tuesday to be performed. Lufthansa Cargo will thus be able to maintain its full flight program.

All Lufthansa customers holding tickets for long-haul travel from or to Frankfurt, Munich or Düsseldorf are urged to check the latest status of their flight on LH.com well in advance of their scheduled departure.

Copyright Photo: Javier Rodriguez/AirlinersGallery.com. Airbus A380-841 D-AIMK (msn 146) arrives at the Frankfurt hub.

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Lufthansa Group establishes Eurowings Europe GmbH, is pleased with the early long-haul bookings

Lufthansa Group (Frankfurt) is happy with the early bookings for its upcoming new Eurowings long-haul services. The group also established Eurowings Europe (Vienna) on August 10. The group issued this report:

Eurowings (2014) logo (large)

The new Eurowings looks all set for a successful launch of its attractively-priced long-haul services. Three months ahead of its first such flights – to the Caribbean, Thailand and Dubai – Lufthansa’s new budget-fare subsidiary reports promising booking levels.

“As the customer demand confirms, what we’re offering here is a highly attractive long-haul air travel product,” says Karl Ulrich Garnadt, Member of the Executive Board of Deutsche Lufthansa AG and CEO of Lufthansa German Airlines. “Our strategy of offering our further Eurowings brand, which is aimed particularly at price-sensitive leisure travellers, clearly meets a market need. And our decision to commence these operations in Cologne and the North Rhine Westphalia region has proved a prudent one, too.”

The new intercontinental services will be operated with Airbus A330-200 equipment (above). The first two aircraft are already being prepared to enter revenue service at the beginning of November. The Eurowings long-haul fleet will then gradually be expanded to seven Airbus A330s.

The new Eurowings is adopting the business and marketing concept that has already proved successful with its sister carrier Germanwings, which has firmly positioned itself as an innovative quality low-cost airline.

Germanwings (2nd) (13) logo

 

While Germanwings is focused on the German air travel market, Eurowings will now expand the concept throughout Europe, and will further extend it to intercontinental city and vacation destinations.

Eurowings will be opening its first operating base outside Germany in Austria. In collaboration with fellow Lufthansa Group carrier Austrian Airlines, Eurowings will offer European services from and to Vienna using Airbus A320 equipment – one aircraft from the 2015/16 winter schedules, and a second from March 2016. Both aircraft will be operated by Austrian Airlines.

The new Eurowings Europe GmbH was founded in Austria on Monday, August 10.

The company will serve as the starting point for further growth, which will see the establishment of several more operating bases throughout the European continent. Eurowings Europe is currently setting up its flight operations, which includes creating its own cockpit and cabin crew corps.

The new Eurowings cockpit crew positions are initially being advertised internally within Lufthansa, to give priority to existing pilots from the Lufthansa Group and those who have completed their flight training in Bremen and are awaiting suitable vacancies. The pilot recruitment process should then be extended to outside applicants in the second half of August. The cabin crew recruitment process will begin in the second half of September.

The remuneration systems at Eurowings Europe will be aligned to those already in place at other airlines within the Lufthansa Group. But they will also pay due regard to the particular conditions and challenges of the low-cost airline sector, particularly in terms of productivity levels and seasonal demand fluctuations.

The new remuneration packages will also feature attractive occupational pension benefits. As well as offering an employer’s retirement savings contribution amounting to 2% of the employee’s basic salary, Eurowings will increase this contribution to 2.5% for any employee who undertakes to make their own employee’s savings contribution of 1.0%.

Copyright Photo: Gerd Beilfuss/AirlinersGallery.com. Former EVA Air Airbus A330-203 B-16301 (msn 530) became D-AXGA with the new Eurowings.

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Lufthansa today unveils its new Premium Economy Class on D-ABYQ

Lufthansa Premium Economy Class

Lufthansa (Frankfurt) has converted its first aircraft with the new Premium Economy Class. The company issued this statement:

At 11.00 a.m. today, LH 9880, a special flight took off from Frankfurt Airport. On board the Boeing 747-830 was the new Premium Economy Class. The aircraft, with the registration number D-ABYQ (msn 37839(, is the first in the Lufthansa fleet to offer the new class of travel on board. Experts from Lufthansa Technik have fitted the Boeing 747-8 with the 32 new Premium Economy Class seats and performed all the necessary quality checks.

The aircraft, which is called the “Schleswig-Holstein”, flew over the German region of the same name in a two-hour special flight.

“Today, we are seeing a genuine première”, said Karl Ulrich Garnadt, Member of the Executive Board of Lufthansa AG and CEO of Lufthansa German Airlines. “We are launching a new travel class for the first time in 35 years.” Garnadt stressed that Premium Economy was an important part of the “biggest product upgrade in Lufthansa’s history”. By late summer of next year, Lufthansa will have modified First, Business and Premium Economy Class on its entire long-haul fleet according to schedule and as part of its quality campaign. “With Premium Economy Class alone, we will be able to offer some 1.5 million passengers per year the opportunity to choose extra comfort and quality at affordable prices,” said the German Airlines CEO.

Lufthansa Premium Economy Class entertainment

From as early as December 1 – nine days earlier than scheduled – Lufthansa customers will be able to enjoy Premium Economy Class on all flights on the Boeing 747-8 fleet. The “dash-8 fleet” will then offer by far the most cutting-edge and exclusive travelling experience available at Lufthansa.

Premium Economy Class seats will make up some ten percent of the entire seating capacity on each wide-bodied aircraft. Over the next few months, Lufthansa will thus fit between 21 (Airbus A330-300) and 52 (Airbus A380-800) new seats in each of its aircraft. On board the Boeing 747-8, 32 seats will be modified in line with Premium Economy Class specifications. The airline commissioned a total of 3,600 seats from the manufacturer ZIM.

“Booking levels to date have significantly exceeded our expectations”, Garnadt added. “This shows that we are striking a chord with customers with our new offering. As well as cost-conscious business travellers, we’re also attracting the rapidly growing target group of leisure travellers who don’t want to skimp on on-board comforts during their holidays.”

Lufthansa Premium Economy Class benefits

Alongside Premium Economy Class, Lufthansa is also working intently on upgrades to First and Business Class on board its long-haul aircraft. All these quality-related measures are set to be completed by late summer 2015. Lufthansa will then be in a position to offer its guests in all classes the exclusive travelling experience of a prizewinning five-star First Class as well as the new Business Class, where aircraft seats can be transformed at the touch of a button into a comfortable bed with a horizontal sleeping area of 1.98 metres long.

“I firmly believe that, with this package of products and measures, we will undoubtedly achieve our objective of becoming the first Western five-star airline”, said Garnadt.

Lufthansa is currently offering special introductory prices for Premium Economy Class flights. For instance, return flights to Washington D.C. are available from as little as EUR 1,199, while passengers to Beijing can enjoy the new travelling experience for a mere EUR 1,249.
In addition, no rebooking fees are being charged to passengers looking to rebook from Economy to Premium Economy Class. As soon as Lufthansa Premium Economy Class becomes available on a flight route, an existing Economy Class booking can be upgraded to Premium Economy Class. Passengers will only have to pay the difference between the fares of the two tickets, provided that no changes are made to the original flights that were booked. This applies even if the original ticket was booked for a price that did not permit rebooking.

To increase global awareness of the new Premium Economy Class on the market, Lufthansa launched a broad marketing campaign already in mid-September. At the heart of this campaign is its “Recorder” TV advertisement (below). This shows the British musician Duncan Townsend experiencing the extras available in Premium Economy Class for the first time. Brandishing a sound recorder, he combines many different snippets of sound that he hears on his journey into a rhythm, which ultimately evolves into a re-interpreted version of Billy Idol’s “Rebel Yell”: “More, more, more…”

Lufthansa will introduce its new Premium Economy Class on December 1 on the following routes from Frankfurt: Beijing, Buenos Aires, Chicago O’Hare, Hong Kong, Los Angles, Mexico City, Sao Paulo, Seoul and Washington Dulles.

For more information: CLICK HERE

All images above by Lufthansa.

Copyright Photo Below: Bjoern Schmitt/AirlinersGallery.com. A dramatic view of Lufthansa’s Boeing 747-830 D-ABYI (msn 37833) on final approach to the runway at Los Angeles International Airport over the parking lot.

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Lufthansa cancels 25 long-haul flights today from Frankfurt

Lufthansa (Frankfurt) today is dealing with another strike by its pilots, this time affecting its long-haul flights from the Frankfurt hub. The airline issued this statement:

Owing to the renewed strike announced by the Vereinigung Cockpit (VC) pilots‘ union, Lufthansa has cancelled 25 long-haul flights from Frankfurt for Tuesday, September 30. A total of 57 intercontinental flights were originally scheduled from Frankfurt tomorrow and 32 of those are planned to depart. Of those 32 flights, 26 will be flown by volunteer pilots, two others will depart earlier and four have been deferred to the following day (Wednesday).

The Lufthansa hub in Munich will not be impacted by the strike: Flights to and from Düsseldorf and short-haul flights from and to Frankfurt will also operate as scheduled. Furthermore, flights operated by the Lufthansa Group airlines Austrian Airlines, Brussels Airlines, Germanwings, Swiss and Air Dolomiti (OS, SN, 4U, LX, EN) will not be affected either.

This fifth strike action within just four weeks will hit Lufthansa in the busiest air-traffic month of the year. Both the number of scheduled flights as well as capacities are traditionally at their highest level over the year at the end of September. Moreover, it is especially difficult at the end of the month to change crewing rosters and get pilots to volunteer for flights because planning options are restricted by the monthly limits on pilots’ flight-duty hours. Furthermore, Lufthansa is barred from resorting to night flights by the stringent night-flight ban after 11 p.m. at its home base in Frankfurt.

“Even if we manage under these difficult conditions to get more than half our scheduled long-haul flights from Frankfurt off the ground with volunteer crews tomorrow (Tuesday), the walkout will again severely damage our reputation and erode confidence in our airline’s reliability. The VC union’s repeated resort to strike action will damage Lufthansa with unforeseeable consequences for all 120,000 employees, including the pilots”, emphasized Kay Kratky, member of the Lufthansa German Airlines Board with responsibility for Operations and the Frankfurt Hub. “We apologize explicitly for the measures taken by the VC union, which is the only collective bargaining partner at Lufthansa intent on uncompromising and inconsiderate pursuit of its individual interests.”

Copyright Photo: Long-haul flights to the United States are severely impacted today. Airbus A340-642 D-AIHW (msn 972) taxies at Los Angeles.

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Lufthansa Group’s first quarter loss widens to $602 million

Lufthansa Group (Lufthansa) (Frankfurt) reported its net loss for the first quarter widened to $602 million, up from a loss of $516.8 million in the same quarter a year ago. the first quarter is usually the weakest quarter for the carrier.

The airline issued this statement:

In the traditionally weak first quarter, Deutsche Lufthansa AG recorded an operating result on a par with last year at EUR -359m. The operating result includes restructuring costs of EUR 64m from the SCORE programme. Earnings improvements in the operating segments helped the Group make up for the extra costs. The net result for the period fell by 16.5 per cent to EUR -459m due to impairment losses and other valuations as of the reporting date. At EUR 6.6bn, revenue for the Lufthansa Group in the first quarter remained stable.

“We took another step towards our target of sustainable earnings improvements in the first quarter. Nearly all the Group companies improved their result,” explained Simone Menne, Member of the Executive Board, responsible for Finances and Aviation Services at Deutsche Lufthansa AG. “We are firmly on course with our SCORE programme.”

In operational terms, the Group improved its result by a total of EUR 95m in the Passenger Airline Group, Logistics, MRO, Catering and IT Services segments. Lufthansa German Airlines achieved the greatest improvement in the operating result, with an increase of EUR 77m. Thanks to a notable reduction in the number of flights and its optimised capacity management, the company boosted the load factor of its aircraft in the first quarter to 75.5 per cent and at the same time increased its yields. The strike by Lufthansa ground staff on 21 March depressed the operating result for Lufthansa German Airlines, as did high fuel costs and the long winter, which also weighed on the other airlines in the Lufthansa Group.

At the end of the first quarter 2013, Lufthansa German Airlines reported an operating loss of EUR 292m. At SWISS, the operating result came to EUR -16m, compared with EUR -3m in the same quarter last year. Austrian Airlines improved its operating result by EUR 11m to EUR -56m. Overall, the operating loss for the Passenger Airline Group segment improved to EUR -363m.

The Lufthansa Group also improved its operating result in the Logistics segment. Lufthansa Cargo increased its operating profit, in part thanks to targeted capacity management and lower depreciation and amortisation. At the end of the first quarter, the figure for the segment was EUR 27m, a rise of EUR 7m. The operating profit for the MRO segment was up by EUR 16m to EUR 81m. Lufthansa Technik adopted some 200 individual measures as part of SCORE in the first quarter, which by 2015 are intended to improve the organisation of administrative functions and align them better with customer needs. LSG SkyChefs improved its operating result by EUR 9m, posting an operating profit of EUR 3m for the period January to March. In the IT Services segment, Lufthansa Systems earned an operating profit of EUR 3m, compared with EUR 4m in the same quarter last year.

Given the improvement of the operating results for the Group companies in the first quarter, the positive contributions by SCORE and stable demand in the passenger business, the Group confirmed its earnings outlook for the year 2013. The operating profit for the Lufthansa Group in 2013 is predicted to be higher than the EUR 524m achieved last year. Positive earnings contributions from SCORE should not obscure the need for further change, however, emphasised Simone Menne, adding, “In competition with well-funded competitors, especially from the Middle East and Far East, and with low-cost airlines in Europe, we need new structures that will allow us to generate higher profits again. Putting the agreed measures into practice remains a challenge. We nevertheless intend to pursue our chosen path and shape our future with the required perseverance.”

The first quarter of 2013 in figures

Revenue for the Lufthansa Group in the first quarter of 2013 came to EUR 6.6bn – an increase of 0.1 per cent on the previous year. Traffic revenue declined by 0.2 per cent to EUR 5.3bn. Overall, the Group’s operating income went up to EUR 7.2bn in the reporting period, an increase of 0.3 per cent.

Operating expenses rose by 1.7 per cent in the first quarter to EUR 7.7bn. Fuel costs climbed by EUR 36m to EUR 1.7bn. This represents an increase of 2.2 per cent. Included in this amount is a negative contribution of EUR 25m from fuel hedging. Fees and charges fell by 2.2 per cent on the previous year, due to a lower number of flights.

In the first quarter, the Lufthansa Group reported an operating result on a par with the previous year of EUR -359m. To facilitate comparison, the operating result for the same quarter last year was adjusted by EUR 22m following the amendments to accounting standard IAS 19. Following this adjustment, the result for the first quarter of 2012 also came to EUR -359m.

The net result for the period was down by 16.5 per cent to EUR -459m. Expenses for severance pay and compensation as part of the SCORE job cuts depressed the Group’s result for the first quarter, as did impairment losses and valuation effects. Earnings per share sank to EUR -1.00.

Lufthansa invested EUR 718m in the reporting period. Of this sum, EUR 657m went on modernising and maintaining the fleet. Cash flow from operating activities came to EUR 976m and free cash flow (cash flow from operating activities less net capital expenditure) to EUR 463m. For the first quarter, the Group had net debt of EUR 1.7bn. Following the application of new accounting standards (IAS 19), the equity ratio is now 15.4 per cent.

Lufthansa Group January–March  Change
    2013 2012** 2012(old) 0.1%
Total revenue €m 6,628 6,619 6,619 0.1%
of which traffic revenue €m 5,337 5,349 5,349 -0.2%
Result from operating
activities
€m -464 -358 -379 -29.6%
Operating result €m -359 -359 -381 0.0%
Adjusted operating
margin*
in % -5.2% -5.2% -5.6% 0.0%
Net profit/loss for the period €m -459 -394 -379 -16.5%
Capital expenditure €m 718 592 592 21.3%
Cash flow from
operating activities
€m 976 833 833 17.2%
Employees as of 31.3.   116,516 120,898 120,898 -4,382
Earnings per share -1.00 -0.86 -0.87 -0.14

*) Operating result plus write-backs of provisions, divided by revenue
**) Previous year’s figures have been adjusted in line with changes to IAS 19

Copyright Photo: Brian McDonough. Lufthansa is gradually replacing its older Boeing 747-430s. D-ABTF (msn 24967) climbs gracefully away from Dulles International Airport near Washington, DC.

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