Lufthansa says pilot’s strike to cost up to $103 million

Victoria Bryan reported on the negative impact the recent pilot strikes have had on the Lufthansa Airlines’ balance sheet, but also on it’s worldwide customer relationships, in the American Reuters Magazine on Friday 4 April 2014. The German airline had to cancel a total of 3,800 flights, which resulted in a loss of $103 million. According to Kratky, Chief Operation Officer of Lufthansa Airlines, the consequences are disastrous. Critics argue that the ‘never ending strikes’ do not communicate a healthy internal market culture. Seven groups of Lufthansa employees have been on strike in the past 12 months. Kratky fears that ongoing strikes could result in customers thinking twice about travelling with the German company.

Source: Reuters/Michaela Rehle

The request of the above-average-paid pilots is higher remuneration, as well as an even earlier retirement. This demand has not only resulted in outrage in the German media, but also amongst other employee groups within the 118,000 people strong company. Lufthansa’s Chief Executive, Christoph Franz, apologised to customers for the inconvenience caused and ‘begged’ them to please stay loyal. The large amounts of strikes make internal marketers curious whether the company has simply a very weak working culture or if the unions are just so strong that there is continuous ambition for more success.

According to primary research, pilots at Lufthansa are proud of their jobs and feel a strong commitment to their customers. However, where is the passion for service when they know that their strikes result in a complete shut down of the German airways? Lufthansa should invest in stronger internal market relationships not only in every work segment, but across all employees to minimise strike cost and to improve its working culture.

Source: AP

Employees have discussed online their disappointment about the bureaucracy practised at Lufthansa, which slows down the communication between management and front line staff. From an outside perspective, it seems that the firm is very hierarchal, but also consists of a very flat structure at the bottom due to the very diverse expertise required for airline operations. A former employee who worked ten years for the brand suggests that senior management should not forget to motivate employees, even during difficult times, and that they should not wait too long before announcing new structures to secure one of the two most precious stakeholders of all…their employees.

Lisa Grobien
Current student in the Master of Marketing program at the University of Sydney Business School