Lufthansa Group stated (01-May-2013) the Air Traffic Employers’ Association (AGVL) and ver.di reached an agreement at pay negotiations for Lufthansa ground staff at the fourth round of wage talks for the around 30,000 ground staff employees of the company. The agreement, set to run for 26 months, provides for pay rises differentiated by business segment. It is valid for 26 months from 01-Feb-2013 to 31-Mar-2015. Under the terms of the settlement, employees of Deutsche Lufthansa AG are to receive a pay increase of 3.0% in two stages, the first on 01-Aug-2013 (1.5%) and the second on 01-Aug-2014 (1.5%). The increase reflects the "current difficult situation at Lufthansa German Airlines". Meanwhile, pay for staff at Lufthansa Technik and Lufthansa Cargo is to rise in two stages by 4.7%, including 2.4% on 01-Aug-2013 and a further 2.3% on 01-Aug-2014. Staff at Lufthansa Systems are to receive similar increases to those at Lufthansa Technik and Lufthansa Cargo on 01-Nov-2013 and 01-Nov-2014. A pay rise of 5.2% is also to be granted in two stages to trainees at all the business areas: 2.7% on 01-Aug-2013 and 2.5% on 01-Aug-2014. A business area-specific settlement for employees at LSG SkyChefs was concluded last February. Additionally, the two sides have agreed on the principal details for new and competitive pay structures for decentral stations and Global Business Services, in which Lufthansa is to bundle specific administrative functions. Pay agreements are to be worked out by 31-Oct-2013. Lufthansa is also to refrain from compulsory redundancies as part of employment safeguards up to 31-Mar-2015. This commitment is valid for employees switching to the new pay structures up to 2020. In return, ver.di has agreed to six “pay-freeze“ months from Feb-2013 to Jul-2013 as the union’s contribution to the SCORE programme at safeguarding earnings at the Lufthansa Group. The two sides must approve the agreement by 31 May 2013. Lufthansa labour director and AGVL negotiating leader Stefan Lauer commented:“This pay settlement sends a major signal in respect of differentiated wage agreements within the Lufthansa Group and will thereby contribute to the success of the SCORE programme designed to underpin the Group’s future. At difficult but constructive negotiations, we have concluded a fair settlement in the interests of both sides, which opens up further future perspectives. It is important now that we offer our passengers reliable flight schedules free from disruption".[more - original PR] [more - original PR - German] [more - original PR - German - Ver.di]
Lufthansa and ver.di reach agreement at pay negotiations, marks end to strike action
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Lufthansa and Etihad: equity tie up could further align mutual strategy, but marriage unlikely
Greater cooperation between Lufthansa and Etihad reflects their local and global challenges growing in quantity and complexity. Contact between the two has led to speculation that the partnership could radically expand to include an equity tie up, with rumoured merger talks.
Their initial Dec-2016 codeshare announcement was, in practical terms, small but showed the possibility, as they stated, to expand cooperation. However, it would be a leap to go from their handful of codeshares to a 17-Jan-2017 article from Italian daily newspaper Il Messaggero that Etihad could invest in Lufthansa on the way to a possible merger between the two. A subsequent denial in a Reuters story that "A financial stake is out of the question at the moment", does little to dispel the rumour. Were it not for the last three words of that statement the rumour would lack credibility.
There is certainly logic for a deeper partnership - and the two have danced this waltz before. Equity involvement from airlines can cement partnerships, add to board influence and partially allow one side to gain financially from any matter it feels it is compromising away. Nevertheless, there are obstacles to a full blown merger, and even to Etihad's taking a 30% to 40% stake. A marriage between the new bedfellows does not seem an immediate prospect. Nonetheless the logic is there for a move; and the mere fact of a potential move is sufficient to rock the equilibrium.
Eurowings: new Munich routes outsourced to airberlin. Frankfurt hub may be next for Lufthansa's LCC
When Lufthansa began to transfer point-to-point short haul routes to its LCC Germanwings in 2013 it specifically excluded routes to/from its two main hubs at Munich and Frankfurt. Although its two main hubs have been less penetrated by LCCs than many other major European airports, this is changing. Moreover, competitor LCCs are growing rapidly across Germany and in other Lufthansa Group home markets. Even Air France-KLM established a Munich base for its LCC Transavia in summer 2016 (but this is under review). More ominously, Ryanair is to enter Frankfurt in summer 2017.
Lufthansa first revealed in summer 2016 that it was considering opening a Munich base for its LCC operations, now grouped under the Eurowings brand. On 21-Dec-2016 it announced plans to base four A320 family aircraft at Munich for 32 Eurowings routes from summer 2017.
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