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Unions fight reform at European airlines

Tuesday, September 30, 2014 - 02:09

As one pilots' strike in Europe ends another begins. This time Lufthansa pilots are staging a 15-hour stoppage in Germany. After the costly strike at Air France Hayley Platt looks at the challenges facing the flagship carriers.

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50 long-haul flights from Frankfurt were cancelled as a fifth strike at Germany's Lufthansa got underway. The 15-hour-long walkout by pilots is part of a long standing dispute over an early retirement scheme. It allows pilots to retire at 55 with 60% of their salary. (SOUNDBITE) (German) TRAVELLER, DORIS MAIER, SAYING: "I believe pilots earn enough and I don't understand why they are fighting each other this way." (SOUNDBITE) (German) TRAVELLER, DAVID HOFFMANN, SAYING: "Everybody has the right to go on strike, including this profession." The walkout comes as pilots at another European flagship airline get back to work. The two-week long strike cost the Air-France more than 250 million euros. It was over Air France/KLM's plans for its low-cost Transavia service. At the weekend Chief Executive Alexandre De Juniac said the airline couldn't afford not to change. (SOUNDBITE) (French) CEO OF AIR FRANCE-KLM, ALEXANDRE DE JUNIAC, SAYING: "We're going to create 1,000 jobs in France including 250 pilots, we're finally going to be able to face up to the competition from low cost companies on an equal footing. This reform is vital." Many of Europe's long-established carriers have clashed with unions as they try to reform. Industry experts say many staff are under-estimating the threat from low-cost rivals. Both Lufthansa and Air France have cut their earnings expectations this year. In contrast Europe's largest budget airline Ryanair has upped theirs. Tom Elliott is from De Vere Group. SOUNDBITE: Tom Elliot, investment strategist, De Vere Group, saying (English) "Business class is the money earner and that's doing quite well for most flag carriers. But business class alone cannot keep them going. So they have to respond with their own cheap airline to rescue their economy side of the business." Half of Europe's air travel market is now taken up by budget airlines. And old timers like Lufthansa and Air France now realise that's where the money is. Air France has big plans for Transavia. And Lufthansa wants to expand its regional carrier Eurowings, possibly introducing a new low-cost long-haul arm. Their biggest barrier of course, is the powerful unions, which show no signs of giving up the fight.

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Unions fight reform at European airlines

Tuesday, September 30, 2014 - 02:09