Finance-media-centre: Lufthansa contra Cockpit, a strike that influeces the economy recovery?

February 22nd 2010
Dear Reader; How easy is it to bring uncertainty into a society?

The Pilot Association „Cockpit” declared a strike this morning that actually is the biggest strike in the history of German aviation. 4000 Pilots (Cockpit) are striking against Lufthansa and fighting for their rights. Aim is to prevent outsourcing German jobs into foreign countries and to the associated companies (e.g. Brussels Airlines or Austrian Airlines). The German Lufthansa should work with German pilots and not with foreign employees only because of a cheaper loan situation is the argument of “Cockpit”. This conflict is always a highlight between “Cockpit” and Lufthansa but this time the timing could not be worse.

It is “only” a strike of Lufthansa’s pilots? What side effects can such an event arise?

- Spiegel online takes in a liberal position focusing on the customer’s point of view. Passenger’s interest is definitely main issue and the used language is full of emotions describing different characters and the situation itself. Spiegel is focusing on the “people” and showing passenger’s opinion to create emotion and a kind of panic of the people in Germany.

- Welt online takes in a more objective point of view by describing the situation of passengers, pilots, Lufthansa and the pilot association “Cockpit”. One statement “Lufthansa aircrafts should be guided by Lufthansa people” shows the impulse to keep German pilots in the aircrafts. Welt online underlines also the passengers situation what shows a more objective but still liberal point of view.

- Frankfurter Allgemeine Zeitung (FAZ) reacts more aggressively to the issue between “Cockpit” and Lufthansa. The legal situation between Lufthansa and Cockpit is unclear and the labor court will take care of the decision in the following days. FAZ shows the point of view of both parties. Cockpit and Lufthansa are both fighting for their arguments. The pilots want to be sure to avoid foreign deployment especially because of associated companies which offer cheaper pilots from other countries to Lufthansa. Lufthansa itself sees the situation positive and tries to stay with their argument.

- In comparison, the German Süddeutsche Zeitung (SZ) focuses on the influence of the strike on the economical situation. SZ states that the conflict is stuck for a long time. The strike will cost € 20 Million a day for Lufthansa (in case of an ongoing strike). The company share price broke down about 1, 6 % in the morning. “In a political matter the strike could lead to a delay of the economical recovery” this statement shows a wider understanding because the strike affects the whole industry and Germany as a whole. Pilots demanding 6 % more loan is unrealistic and according to the SZ it is not justifiable as they are earning minimum 6.000 € and some more than 10.000 € a month.

- The Guardians Headline “Lufthansa strike 'threatens Germany's fragile recovery” summarizes it up. The Guardian also demonstrates the situation in a more dramatic way than the German news: "We all know that a strike at this time could have horrendous consequences that would stretch far beyond the aviation industry".

- The Financial Times provide the reader with a quiet objective point of view but is taking also a more pessimistic point of view what shows the danger of such conflicts of the industry and its possibilities of escalation.
- Also the German Lufthansa Aktie was influenced directly by the action (-1.6 %). (http://www.finanzen.net/aktien/Lufthansa-Aktie@pkZeit_7).

After reviewing different sources of news I wanted to point out how easy an event like this can change the situation of a whole country. The transportation system is needed every day and no country can afford being cut off from transport, electricity or communication systems for a longer time. 2008 and 2009 were difficult years for global economy and therefore also for huge businesses as Lufthansa. On the one hand side a job guarantee is not given in the airline industry because of a possible change of fuel prices and circumstances of travel depending on green issues etc. This proves the pilots reaction of insecurity. The action of Lufthansa is understandable because Lufthansa tries to allocate and to decrease costs in any possibility. On the other hand side a strike of “Cockpit” is absolutely understandable to prevent any outsourcing of German jobs. As in many conflicts the main issue is money.

I think in a phase of economic recovery, a state and its system has to try to avoid any action that could bring up uncertainty to a country. Outperforming competitors in the branch depend on the brand and its employees. Both parties “Cockpit” and Lufthansa have to find a short term and a long term solution to prevent economical and business damage. Any governmental interaction is in my opinion useless because the two parties should find a solution by themselves and they actually did in the last days.

I want to point out that any irregular circumstances that influence many people (workers) in a country can easily change the situation and the mood of the people. Therefore economical development, financial solutions for important businesses, transport and communication are the key for a stable economic recovery.

Sources used:

The Guardian: Lufthansa strike "threatens Germany´s fragile recovery"

Viewed: 28.02.2010

Available URL: http://www.guardian.co.uk/business/2010/feb/22/lufthansa-strike

Financial Times: Lufthansa braces for four-day strike
Viewed: 22.02.2010
Available URL: http://www.ft.com/cms/s/0/2ff9a734-1f23-11df-9584-00144feab49a.html?nclick_check=1

FAZ: Am Boden verstört

Viewed: 22.02.2010

Available URL: http://www.faz.net/s/Rub4D8A76D29ABA43699D9E59C0413A582C/Doc~E3C86B2DEE22B453EB8700B82DA994571~ATpl~Ecommon~Scontent.html

Die Weit: 40 % weniger Flüge

Viewed: 22.02.2010

Available URLhttp://www.welt.de/wirtschaft/article6504877/40-Prozent-weniger-Fluege-Was-Reisende-erleben.html

SZ: Pilotenstreiks ausgesetzt

Viewed: 22.02.2010
Available URL: http://www.sueddeutsche.de/,tt4m1/wirtschaft/703/503921/text/