Lufthansa Travel Turmoil Set to Worsen With Ground Staff Strike

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Lufthansa Travel Turmoil Set to Worsen With Ground Staff Strike
Credit: © Reuters.

(Bloomberg) -- Deutsche Lufthansa (ETR: LHAG ) AG’s ground-crew union called a strike for Wednesday, escalating a crisis at Europe’s biggest airline after staffing shortages caused thousands of flights to be cancelled earlier in the summer.

The Verdi labor group called for members to take part in industrial action at Lufthansa’s German airport bases, a move that could see check-in personnel and other staff walk out over pay and conditions.

“Verdi is calling the one-day strike to raise pressure on the employer to make a much-improved and acceptable pay offer in the next round of talks,” the union said in a statement on Monday.

The move is likely to worsen the plight facing Lufthansa as it battles to cope with the twin demands of a sharp rebound in travel bookings and the impact of soaring inflation on pay packets. Passengers at airlines and airports across Europe have endured weeks of disruption as chronic worker shortages lead to delays and cancellations.

While Lufthansa had so-far avoided the industrial action snaring rivals like Ryanair Holdings Plc (NASDAQ: RYAAY ), its unions are starting to round on the airline’s management. Members of Lufthansa’s VC pilots union are holding a vote on whether to go on strike, a move that would inevitably lead to a further cut to scheduled flights.

Chief Executive Officer Carsten Spohr has pledged to boost earnings before interest and taxes to a minimum of 8% by 2024, a move he said is needed to reduce debt. Disputes with worker representatives suggest Spohr might have trouble reaching those targets, as he tries to balance the need for more staff with his desire for lower costs.

Still, the airline earlier this month said it returned to profitability in the second quarter, benefiting from surging travel demand that’s forced the sector to raise fares and limit seat availability.

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