Lufthansa in strike related cancellations mess again

Reuters has reported that Lufthansa pilots’ strike has entered the 3rd consecutive day leading to hundreds of cancellations with the worst affected being the long haul flights. The strike called for by Vereinigung Cockpit (VC) the union representing the pilots demanding better contracts is expected to continue on Friday also. For more details check out the Lufthansa page here.

With the advent of low cost airlines on its short and medium haul routes and the Gulf carriers eating their share away on the long haul market, Lufthansa has struggled to cut costs on the employee and operational front. The Middle East carriers are already offering the premium customers the lure of better service and the low cost airlines are pulling the price conscious. The dispute has already resulted in 10 strikes last year and is expected to yield similar lockouts for this year also unless this matter gets sorted out. The airline just like its counterpart Air France –KLM which has also suffered similar strikes is expected to lose considerably both in terms of money and customer loyalty. No one wants to fly an airline whereby you cannot guarantee whether they would be flying out next day or not. This unpredictability will drive even the corporate business away for whom time is money.

All these strikes are not going to help anyone in the long run. High costs will not be able to justify the airlines existence and long term viability in this current competition. Lufthansa realizes that and is responding to the changing dynamics by focusing on its budget operations and rightsizing its cost structure but it forgot to sell the idea clearly to its employees. Unless you get your own people buy in to your ideas it’s very difficult to execute the strategy that they are trying to put in place. In my opinion Lufthansa should stick to one clear plan and stick to it, Spin off the Eurowings and German wings units to work as independent operations and focus on making the best of the excellent service it provides on its flagship product. Mix and match of both worlds are not going to win anyone anything here.

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