Flying
Typers Exclusive—News
headlining the woes of Lufthansa recently has detailed
one challenge after the other for the past 18 months
as share prices for the airline have suffered.
For the past 18 months,
Lufthansa’s woes have littered the news with one
challenge after another, and as a result share prices
for the airline have suffered.
Lufthansa has been the
target of almost non-stop strikes and walkouts. The
catastrophic crash of a Germanwings airplane (now Eurowings,
the daughter of Lufthansa) due to a mentally unstable
pilot didn’t help matters.
Last year brought the
longest strike (7 days) in Lufthansa's six decades.
Add to that unsettling
and recurring executive turnovers, including several
defections to other airlines and industries (most notably
Simone Menne, who suddenly and without warning left
her job as the airline CFO earlier this month), and
cryptic announcements by the airline, and the result
is a shared concern about the long-term vitality of
Lufthansa Cargo.
As everyone learned that
Lufthansa Cargo would axe 800 jobs out of a workforce
of 4,600 in September, the unspoken fear is that these
layoffs may just be the tip of the iceberg.
FlyingTypers spoke
to people close to the action who shared some views
under cover of anonymity.
“It is highly unlikely
that even with the labor cutbacks announced, Lufthansa
Cargo will continue in its current form,” said
a source close to the airline.
“Financial gymnastics
can only take you so far.
“And one more rebooting
program floated out to the market will not suffice,”
the source added.
Lufthansa Cargo’s
austerity program tagged C40 aims to reduce spending
on personnel and services by €40 million annually.
The source continued,
“Lucky if C40, based on the reaction of the market,
doesn’t end up like runaway C4, blowing up after
what may be changing too little, too late, at Lufthansa
Cargo.
“Long term, Lufthansa
Cargo needs a sustainable business plan that recognizes
market conditions, and that could include, for example,
moving away from the big freighter fleet, especially
the MD11Fs,” the source added.
“They (Lufthansa)
apparently have not come to that moment of truth just
yet.
“Lufthansa Cargo
should also consider that immersing itself into a string
of joint ventures, alliances, and shared services everywhere—while
saving money—could also have the net result of
a loss of identity.
“The recent open
hostility between Air France and KLM should be warning
enough that once things go south, it is near impossible
to ever get back the cache of greatness that once surrounded
a service as esteemed and well regarded as Lufthansa
Cargo,” the source said.
Some others are even less
positive.
 |
A GSA in FRA told FlyingTypers:
“Forget the once famous
Lufthansa Cargo standard and training—that doesn’t
exist anymore.
“Just compare service
levels and customer experience with the competition
today, and have a good, hard look at how much money
per employee these other players spend and what they
expect.”
FlyingTypers also
spoke to current and retired Lufthansa Cargo employees
and most confirmed the rough gist of the aforementioned
statements.
One retired source said, “Lufthansa
threw the baby out with the bath water.
“Part of the cost-cutting
programs included sending the ‘know how’
into early retirement because they wanted to get rid
of the long-time staff with higher salaries.
“They replaced them with
less experienced and lower salaried newcomers who then
tried to reinvent the wheel, as all the expertise was
gone.
“Also handling was outsourced
to handling agents with little or no quality control.
The source continued, “You
cannot win if you only apply cost-cutting measures but
never put into place workable plans to increase sales,
customer service, and quality.”
“Many of the people who
developed our standards and procedures and who had formerly
been with German Cargo when Lufthansa acquired that
company are long gone,” another source said.
“The pride in our brand
and reputation has diminished, and with the latest round
of layoffs it will be difficult for Lufthansa management
to get any form of contribution or cooperation from
employees at all, especially after Lufthansa announced
on May 13 that they want to terminate protection for
long-time employees.
“After all, why should
we work for a better future at Lufthansa Cargo if we
have none?
“If management continues
this way, Lufthansa Cargo’s days are numbered,”
the source said.
FlyingTypers leaves
the last word to a major multi-modal international freight
forwarder, who said of Lufthansa:
“Any service provider
who replaces their dedicated, committed, long-term workforce
with outside rented people is doomed and will lose loyal
customers as well as a loyal workforce.
“Ground personnel for
an airline is as important as the flying teams.
“Lufthansa is doing this
for cost saving reasons—on the cargo as well as
passenger side— but it is a slippery slope, and
if it isn’t stopped, the downturn will gain speed
to the point of no return.
“But I’m sure the
boys with the corner offices have it all figured out
and will float on top of any disaster,” the forwarder
concluded.
Geoffrey |
Vol
15. No. 44
100%
Green