Lufthansa CEO Carsten Spohr eyes pay cuts for Air Berlin crew

Says ready to welcome employees from Air Berlin to build-up airline's Eurowings unit

Deutsche Lufthansa Chief Executive Officer Carsten Spohr said he’s ready to welcome large numbers of employees from insolvent competitor Air Berlin to build up his airline’s Eurowings unit, promoting his company as a safe haven for jobs — albeit with concessions.

“Those of you who have worked with Air Berlin crews know it: These are top people, and we’ll be very glad to get as many as we can over to us,” Spohr said at an internal staff meeting on Thursday. “Of course we cannot hire these employees on Air Berlin terms, but on Eurowings terms, but we do want to be fair and take into account seniority and experience.”

The comments are a clear sign to unions that Air Berlin employees could secure a future at Lufthansa, but only in exchange for curbs to their paychecks, as the companies begin talks on which assets of the collapsing carrier can shift to its larger rival. Lufthansa is interested in operating about half of Air Berlin’s 140-plane fleet, and the discount Eurowings brand, which is in the process of slashing costs per average seat kilometre by 30 per cent by 2020, would be the new home for many of those aircraft and crews.

Air Berlin, which has only posted a full-year profit three times since its shares started trading in 2006, filed for insolvency on August 15 after its main shareholder, Abu Dhabi-based Etihad Airways PJSC, withdrew financial support. Germany’s federal government is providing a 150 million-euro ($176 million) bridging loan, enabling Air Berlin to keep flying for about three months.

Eurowings is already leasing three dozen planes from Air Berlin as part of an earlier effort to preserve the airline. Those aircraft are already part of the 75 that Lufthansa could gain permanently. Spohr has said for months that, before Lufthansa could take over more of the fleet, Air Berlin’s debt burden must be reduced and costs cut.

Bloomberg