Wednesday, 06 May 2020

Lufthansa pilots offer up to 45% salary waiver as a restructuring contribution in the three-digit million range

The corona virus shutdown has nearly brought Lufthansa's business almost to a complete standstill. To safeguard liquidity, short-time working was introduced in the cockpit for the first time in Lufthansa's history. At the end of March, Lufthansa agreed with the Cockpit Association (VC) to reduce cockpit personnel costs in short-time working by the targeted 50%, but this is not enough to bring Lufthansa through a crisis of uncertain duration.

In the course of the wage partners' summit held today, the Group Executive Board informed about the current situation of Lufthansa. The VC President, Markus Wahl, underlined the willingness of the pilots to support the necessary cost-cutting measures if Lufthansa and the cockpit staff take the path to success.

"The pilots of Lufthansa, Lufthansa Cargo, Lufthansa Aviation Training and Germanwings admit their responsibility. For this reason, we have offered the Group Executive Board a significant reduction in wage costs until 30 June 2022, as well as an additional short-term reduction in short-time working pay. For the individual pilot, this means up to 45% lower salary compared to previous years," says Wahl.

The concessions amount to a good 350 million euros and represent a significant contribution to the company's viability. A condition for the offer is that the Group's Board of Management, in return, commits itself to its employees and does everything possible to overcome the crisis together with them in a spirit of social partnership; even a "protective shielding system" (a special form of insolvency under German law) does not meet these requirements.

"We have always said that we, as personnel in the upper compensation area, are committed to our special responsibility, in good times and bad, even if this means painful reductions. Now here is the proof," Wahl continues. "We hope that, together with Lufthansa management, we can return the company to its former strength. It is important that jobs are maintained and dismissal protection is agreed".

Already in 1992, Lufthansa pilots had helped save the company from "going out" by making concessions of about 30%.