New wage agreement for ground staff at Lufthansa

In August 2008, Lufthansa, the largest German airline, reached a compromise with the United Services Union on a new collective wage agreement for the company’s ground staff. After several days of strike action leading to many flight cancellations, the social partners agreed to a total pay rise of 7.4% to be implemented in two steps, initially on 1 July 2008 and then on 1 July 2009. The agreement affects about 34,000 employees at Lufthansa.

In April 2008, the United Services Union (Vereinte Dienstleistungsgewerkschaft, ver.di) called for pay increases of 9.8% for 12 months affecting about 50,000 cabin and ground staff at Germany’s largest air carrier Deutsche Lufthansa. Ver.di also called for the further development of the existing agreement on a profit-related pay scheme for employees at the company. Ver.di’s chief negotiator, Erhard Ott, reinforced the trade union’s demands by claiming that the company had earned major profits in 2007, while positive earning trends were anticipated for 2008 – see WSI Tarifarchiv (in German).

After several bargaining rounds, Lufthansa countered ver.di’s demands with an offer which included a pay increase of 4.6% to take effect on 1 July 2008. The company offered a second pay rise of 2.1% which would follow on 1 July 2009. However, ver.di declined this offer by Lufthansa.

During the bargaining rounds, ver.di organised token strikes. Strike action was taken at German airports for five days at the end of July and beginning of August 2008 before the social partners finally reached an agreement. As the German daily Frankfurter Allgemeine Zeitung (FAZ) noted in an article on 2 August 2008, around 5,000 ver.di members took part in the strike, causing several hundred flight cancellations.

Results of 2008 bargaining round

In a press statement on 1 August 2008, Lufthansa announced the results of the 2008 bargaining round. The final pay agreement foresees a pay rise of 5.1% backdated to 1 July 2008 covering both employees and trainees on the ground. Another pay increase of 2.3% will be implemented from 1 July 2009. Additionally, ground staff will receive a one-off payment of up to 2.4% of their annual wages. This one-off payment includes a performance-related component depending on the business segment in which employees are working. The collective agreement was set for a duration of 21 months, therefore ending on 28 February 2010.

Lufthansa stated that a similar offer for its cabin crew was to be presented to the Independent Flight Attendants’ Union (Unabhängige Flugbegleiter Organisation, UFO). However, UFO has already indicated in a statement to the press (in German) that it will not accept conditions outlined in the pay agreement negotiated by ver.di. The current pay agreement between UFO and Lufthansa expires on 31 December 2008. It should be noted that three trade unions – ver.di, UFO and the German Airline Pilots’ Association (Vereinigung Cockpit, VC) – are all represented at Lufthansa.

Views of social partners

In the press statement on 1 August, Lufthansa’s Director of Human Resources, Stefan Lauer, stressed that the new collective agreement for Lufthansa ground staff represented a compromise well beyond the pain threshold. For Lufthansa, it was only acceptable due to its 21-month duration and the agreement on the one-off payment. Higher costs were to be compensated for by higher productivity. The airline was to resume flight operations quickly to ensure its customary reliability and quality of service.

Ver.di’s chief negotiator, Erhard Ott, stated in a trade union pamphlet (in German, 942Kb PDF) that the final agreement could be considered a reasonable result. Higher wages and a fairer profit-related pay scheme were now assured for employees at Lufthansa. Talking to FAZ on 2 August, Mr Ott made clear that the pay rise of 7.4% had only been achieved with the support of the striking employees.

Sandra Vogel, Cologne Institute for Economic Research (IW Köln)

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