Low unemployment sounds like a good problem, unless you're an airline looking to add routes and hire more flight attendants. Lufthansa is going to have to get creative — or resolve contract issues with the union.
Deutsche Lufthansa AG is struggling to hire cabin crews for new routes, putting growth plans at risk as low wages and years of labor conflict complicate the airline’s recruiting amid a tight German job market.
Through mid-May, Lufthansa has brought on about 500 flight attendants for its namesake carrier, the company said in response to questions from Bloomberg. With the peak summer flying season coming up within a few weeks, that’s a little more than one-third of the brand’s goal to hire 1,400 cabin-crew members in 2016. Including units such as Eurowings, the airline group is seeking 2,800 new flight attendants, adding to a cabin-crew workforce of about 28,000 employees.
With German unemployment touching record lows since late 2014 and a contract dispute with the flight attendants’ union, UFO, now in arbitration, Lufthansa has struggled to lure qualified staff for expansion aimed at taking take advantage of cheap fuel prices. The efforts have been complicated by the airline offering short-term contracts to keep a lid on expenses as it seeks to shift services to the Eurowings low-cost arm. Chief Executive Officer Carsten Spohr earlier this month cited a staff shortage among reasons for scaling back plans to add seat capacity this year.
“Half of our applicants used to come from hotels and restaurants, and given the better prospects there and the worsening conditions at Lufthansa, they’re just not applying any more,” said Nicoley Baublies, a spokesman for UFO.
For a look at more elements of Lufthansa’s capacity constraints, click here.
As a stop-gap, Lufthansa reached an agreement with UFO and other labor representatives in March that calls for flight attendants to work about 5 percent more hours in the summer schedule, equivalent to about 1,000 extra positions, while offering full-time status to some part-time employees.
That still failed to meet the company’s needs. As a result, Lufthansa delayed introducing routes to San Jose, California, and Panama City; scaled back staff on some wide-body aircraft, which in turn triggered extra payments to the other attendants on those flights; and leased planes and crews from other providers.
“We have a certain bottleneck, or else we wouldn’t take these measures,” said Helmut Tolksdorf, a Lufthansa spokesman. “We are really pushing to hire.”
New flight attendants at the Lufthansa brand are hired at 83 percent of full time, with resulting base pay at 1,417 euros ($1,579) a month, excluding extra money for early or late shifts, long-haul work or vacations. By comparison, Germany’s minimum wage amounts to 1,473 euros a month for full-time work, and recruitment advertisements from EasyJet Plc offer the equivalent of about 1,220 euros to 1,800 euros monthly.
Lufthansa’s CityLine division, which serves some of the main brand’s routes, limits work contracts to 36 months, while cabin-crew members at Eurowings are hired on a 24-month contract, with a two-year extension possible. Temporary and part-time contracts keep costs low by reducing overtime pay and ensure wages don’t climb with seniority.
Questions about whether new staff will be put on full-time, permanent work, and a lack of any such contracts at Eurowings, are discouraging people from applying to Lufthansa, UFO’s Baublies said. Even for those hired, not all stay on. As many as half the people recruited don’t complete the training because of the costs for housing during the course, he said.
Lufthansa sees its applicant numbers as “still good,” and entry-level pay is “competitive,” Tolksdorf said.
©2016 Bloomberg L.P.
This article was written by Richard Weiss from Bloomberg and was legally licensed through the NewsCred publisher network.
Photo credit: Lufthansa planes parked in Frankfurt, Germany. Michael Probst / Associated Press