But while restructuring at American Airlines, Delta Air Lines and United Continental Holdings has led to record earnings in recent years, the Europeans remain far less profitable. Their workforces remain restive and strike-prone, they face a web of restrictions from regulators in multiple countries, and for reasons of national pride, the airlines in the big groups continue to operate as separate brands - with many of the associated costs.
Nowhere is the difficulty of changing course clearer than at Lufthansa, which in late November was able to halt a strike that grounded 4,500 flights only after management offered a bonus topping €20,000 ($21,200) per pilot and a 4.4 percent raise and dropped demands for concessions on benefits. The walkout and others over the past three years have cost it more than $500m, and executives say there's not a lot more they can give. "Walk with us and stop defending old-fashioned contracts," Harry Hohmeister, the management board member responsible for the Lufthansa brand, told the pilots at a rally at Frankfurt Airport on Nov. 30. "Help us create our future."
With annual salaries in excess of €255,000 ($270,371) for Lufthansa’s most senior captains, the pilots are among the industry's best-paid. But with Delta’s pilots getting a 30 percent raise, Lufthansa's are seeking 20 percent, and they may still reject the airline’s offer. Just as important, the pilots strongly oppose a plan to more than double the size of Lufthansa's discount operation, Eurowings, to about 200 aircraft. They fret that the unit will hire lower-paid pilots in Austria, beyond the reach of German unions, and that management will expand it at the expense of Lufthansa jobs. "Eurowings is not your enemy," Karl Ulrich Garnadt, the Lufthansa board member responsible for the low-cost carrier, said at the Frankfurt rally. “"It is our only chance to survive the competition we face."
A key reason for the European industry's woes: a surfeit of players, many of them still state-backed.
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