Lufthansa chief Carsten Spohr on Tuesday defended the group’s cost-cutting measures against criticism from unions, describing the establimshmet of new airlines outside the parent company as a “strategic necessity.”

Carriers such as Discover and Edelweiss made it possible to service additional destinations thanks to their more favourable cost structure, Spohr told the general annual general meeting in Frankfurt.

With a fleet of around 100 aircraft based outside Lufthansa’s Frankfurt and Munich hubs, Eurowings is a successful provider of tourist flights, he said about the German low-cost carrier, one of Lufthansa’s best known subsidiaries.

Unions such as the pilot’s union Vereinigung Cockpit, and Ufo for cabin crew, have been criticizing the strategy of outsourcing flight operations to subsidiaries, some of which are not covered by collective agreements, for years.

On Monday, Ufo chairman Joachim Vázquez Bürger described the situation as “destructive competition within the group.”

The Vereinigung Cockpit pilots’ union is calling on the company to enter into collective bargaining negotiations on retirement and transitional benefits for around 4,800 pilots at the core company Lufthansa before the end of May.

Should the talks fail, new strikes at the loss-making parent company Lufthansa could be on the cards.

The Lufthansa core brand was the only group company to report a loss last year.

Spohr cited delayed aircraft deliveries and particularly high location and personnel costs in Germany as the main reasons.

Lufthansa expects the new German government to reduce state costs for aviation security and air-traffic control, said the chief executive.

“It cannot be in the interests of the new German government that Lufthansa only grows outside Germany.”

Source: dpa.com