Lufthansa Stock Down As Pilots Union Calls For Strike On Sept. 2

(RTTNews) - Shares of Deutsche Lufthansa AG (DLAKF, DLAKY) were losing around 3 percent in German trading after the pilots union Vereinigung Cockpit or VC called for a strike on September 2 over failed negotiations on a new wage agreement.

The company in a statement confirmed that Lufthansa and Lufthansa Cargo departures at German airports will be affected during the strike on Friday from 00:01 to 23:59 CET.

Meanwhile, Lufthansa said VC's call for a strike is despite providing a very good and socially balanced offer amid the continuing burdens of the Covid crisis and uncertain prospects for the global economy.

According to the company, VC's demand would increase payroll costs by over 40 percent through inflation compensation and new salary scale, among other things.

Chief Human Resources Officer Michael Niggemann stated that the company needs to find solutions through negotiation.

Lufthansa said it has presented an offer with an 18-month term, in which pilots at Lufthansa and Lufthansa Cargo will receive a total of 900 euros more in basic pay per month in two stages. This will benefit entry-level salaries in particular.

In contrast, VC is demanding, among other things, a 5.5 percent wage increase by the end of the year as a first step, as well as additional compensation above inflation as of January 2023.

According to current estimates, this would increase the payroll cost for cockpit personnel at Lufthansa and Lufthansa Cargo by a good 16 percent over the two-year period proposed by VC.

In total, the demands of VC would increase cockpit payroll costs from 2.2 billion euros by probably more than 40 percent, or approximately 900 million euros, over the next two years.

In Germany, Lufthansa shares were trading at 5.77 euros, down 2.73 percent.