Lufthansa and its pilots still can’t agree

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Talks between Lufthansa and pilot union Vereinigung Cockpit (VC) ended without agreement.  The latest talks, set to be completed by January 31, were led by mediator Gunter Pleuger. Herr Pleuger now will submit a conciliation recommendation to the parties by February 10.  Earlier talks seemed to go nowhere.  This is a long simmering disagreement.

The VC union said in a statement that both sides have “agreed on the content and course of conciliation”.  The union wants a 3.7% average pay increase for each of the last five years. Lufthansa has offered a 4.4% increase in two stages and a one-off payment equivalent to 1.8 months salary. VC previously turned that offer down.

Based on compelling data showing a growing pilot shortage, is it smart for the airline to keep this fight going? Airbus and Boeing both see a growing demand for pilots.  But it is important to note the big growth is in Asia.  Asian airlines are headhunting for pilots – especially captains who can help train younger co-pilots.  In the US we see a rising number of captains reaching retirement age, further depleting the most valuable and experienced pilots.  The FAA’s 1,500 hour issue has been argued as also ensuring a shortage of pilots.  For more perspective on the US pilot situation read this article.

According to a University of Nebraska-Omaha study the top three reasons that aspiring pilots based in the US are changing career plans are the cost of flight training and certification, low pay at regional carriers and the 2013 FAA regulatory change to 1,500 hours.

Back to Lufthansa – the airline has its own highly regarded pilot training facilities.   It should be able to move these cadets into jobs.  But cadets need to be mentored by experienced crews.  But it appears the experienced Lufthansa crews are deeply unhappy.  If Asia beckons with reasonable pay then the best pilots will seek new opportunities.  This could eviscerate the pilot pool of the people the new recruits need to learn from.

Commercial pilots are part of an increasingly mobile profession.  Arbitrage, even with unions, will play out.  Pilots will move the better markets.  It would seem, therefore, that airlines might want to avoid drawn out fights with their pilots.   In US we have seen this start to play out at Delta and after that deal, industry pressure is on to match.  Of course there are still unhappy pilots who want to fight with their airline.

Of course, VC has to wonder how the latest news of Lufthansa and Etihad starting to develop ties might impact their own world.  Even as Lufthansa might not want to prolong the fight, perhaps VC could be more flexible too.   Neither side gains by keeping this fight going.

© 2017, Addison Schonland. All rights reserved.

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