Lufthansa cabin crew set to strike, adding to German carrier’s woes

Over 120,000 Lufthansa passengers will be impacted on Tuesday and Wednesday as the German airline’s cabin crew goes on strike, fighting for a 15% wage hike.

That comes less than a month after Lufthansa’s ground staff also went on strike, throwing the travel plans of over 100,000 passengers into chaos. At the time, the labor union Verdi organized the industrial action to secure a 12.5% pay bump as well as a lump-sum inflation payout. 

However, an agreement between the union of ground staff workers and Lufthansa still hasn’t been signed. 

Now, cabin crew members (represented by German trade union UFO) will also strike, resulting in 1,000 canceled flights and disrupted travel for thousands of passengers in Frankfurt and Munich airports, Lufthansa said in a statement to Fortune.

The strike will start at 4 a.m. and end at 11 p.m. on each of those days. It includes 18,000 Lufthansa crew members and roughly 1,000 Lufthansa Cityline members, DW reported. 

The airline is helping rebook passengers or is offering them railway vouchers as an alternate mode of transportation, the airline’s spokesperson said. 

Lufthansa’s strikes have hurt travelers’ plans but are also hurting its business dearly. In the German carrier’s earnings, released last Thursday, it highlighted that the strikes would hit its first-quarter operating profits due to the costly labor dispute. As for the company’s full year target, Lufthansa said it’ll try to get “as close as possible” to its 8% operating margin target, Reuters reported (2023’s figure for that metric was 7.6%).    

“The uncompromising strikes by the trade union Verdi are damaging our guests, the company and ultimately our employees,” Michael Niggemann, chief human resources officer and labor director at Lufthansa, said in a statement along with the earnings release. 

“We are always open to short-term negotiations with Verdi – however, we bear joint responsibility for finding good solutions. Verdi must suspend strike action and be prepared to enter into constructive negotiations without preconditions.”

Strikes aren’t a hurdle for the large carrier alone—Germany’s central bank warned last month that strikes, which have hit railway services, could negatively impact Germany’s productivity as it reels from an economic crisis. The country’s GDP shrank 0.3% in 2023, narrowly dodging a recession. 

Tailwinds pushing Lufthansa forward

Despite the recent friction with its labor unions, Lufthansa had a good 2023, financially speaking.

The company has seen a strong rebound in travel demand, which has helped it draw a revenue of €35.4 billion ($38.66 billion), up 14.5% from 2022 while its operating profit was up 76% during the same period. 

The German airline saw its passenger volumes grow by 20% last year, and also announced dividends for its shareholders for the first time since 2019.  

“The Lufthansa Group has regained its financial strength,” CEO Carsten Spohr proudly proclaimed in a statement. 

The path immediately ahead may appear rocky, but Deutsche Bank expects that the airline will see strong business in the second and third quarters, even if the first quarter’s performance is dented by factors like the strikes. 

“We think this is a reasonable update from Lufthansa … there is conviction that respectable 2023 levels of profit and cash generation can be broadly repeated in 2024,” analysts at Deutsche Bank said in a note last week.