FRANKFURT - Fearing potential staff cuts, Lufthansa's high-paid German pilots took to the picket lines on Monday, plunging the airline into its longest ever strike and forcing the carrier to cancel hundreds of flights.
Passengers left stranded by the strike that started at midnight local time are being rebooked on other airlines or have to take trains for domestic travel, after last-ditch attempts to reach a compromise failed over the weekend.
Lufthansa expects the strike will cost it about 100 million euros ($135 million) in cash, in addition to lost ticket sales and possible damage to its reputation now that it will ground about 800 flights per day over a four-day period.
European travelers could face additional headaches, as Monday is also the final day of a cabin crew strike ballot at rival British Airways that could cast travel in Europe's second-biggest economy into turmoil as well.
Some 4,000 German pilots voted for the strike at Lufthansa on concerns the company could try to cut staff costs by shifting jobs to foreign subsidiaries such as Austrian Airlines or Lufthansa Italia, where wages are lower.
The starting salary for a first officer in a Lufthansa cockpit is 62,000 euros, for a captain 115,000 euros, according to the company's recruiting website. Media reports put the top end of pilots' salaries at about 325,000 euros.
As we have been saying last week, those pilots want to be treated like managers but are acting like underpaid bus drivers, said a local trader.
Lufthansa's pilots have offered to forego pay increases if in return they get some control over which routes or pilot jobs are transferred to other group airlines. Lufthansa has rejected that demand, saying it would require ceding control over parts of business strategy to its workers and the union.
Germany's economic recovery stalled at the end of 2009, and workers are becoming increasingly concerned that they could lose their jobs. They are looking to employers to promise job security in exchange for concessions on pay, as carmaker Volkswagen has.
Engineering sector workers have also accepted moderate wage increases to help boost employment prospects.
Over the weekend, the pilots' union offered new talks, but Lufthansa said it would not resume negotiations unless the union dropped demands for what it saw as undue influence on managerial decisions, leaving the two parties in a stalemate.
The conflict is very difficult to solve and ongoing strike action could not be ruled out, Equinet analyst Jochen Rothenbacher said.
Rival airlines, rail operators and rental car companies, meanwhile, stand to benefit from the strike as Lufthansa passengers switch to alternative modes of transportation.
Car rental company Sixt ran a full-page paid advertisement in German daily Sueddeutsche Zeitung featuring a photograph of a man in a pilot's uniform and the line: Underpaid? Become a chauffeur at Sixt! Job ads under sixt.de
Shares in Lufthansa were down 1.34 percent at 1004 GMT.
(Reporting by Maria Sheahan; Editing by Mark Trevelyan and Sharon Lindores)