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Thread: Possible travel issues in Europe

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    Possible travel issues in Europe


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    Germanwings Pilots Set to Strike Friday


    FRANKFURT— Deutsche Lufthansa AG LHA.XE +0.11% said Thursday a strike by pilots of its budget subsidiary Germanwings, set for Friday, appeared inevitable after talks with the pilots' trade union over retirement benefits failed to achieve a compromise.


    "We are very disappointed that we can't avert the strike [but] it's not realistic to reach an agreement…in a single day" on complex issues of retirement benefits, said Bettina Volkens, Lufthansa's board member for human resources and legal affairs, in a statement.


    The pilots' union, Vereinigung Cockpit, had said a strike could be averted if the negotiations led to an agreement Thursday. The walkout will affect all Germanwings flights between 6 a.m. and noon local time on Friday.


    Germanwings said it would cancel 116 flights of the 164 scheduled on Friday. The airline said the cancellations would ground at least 15,000 passengers and would mainly affect domestic routes. It said it had drafted a substitute flight plan.


    The airline operates from Berlin, Stuttgart, Cologne, Hamburg, Dortmund, Düsseldorf and Hannover.


    Vereinigung Cockpit wouldn't say if it would extend the pilot strikes at Germanwings to Lufthansa's other airlines, but said it isn't ruling out strikes this weekend or in the coming week.


    "We are readying ourselves for a long labor dispute," a Vereinigung Cockpit spokesman said.


    Lufthansa pilots walked out for three days in April over the same retirement debate, grounding 3,800 flights and shaving EUR60 million from the company's operating profit.


    The dispute centers on shifts in pilots' retirement benefits stemming from changes to retirement ages. Under current rules, pilots can retire at age 55 and receive 60% of their wages. The European Union recently changed pilot-licensing rules, allowing them to fly until age 65. Lufthansa has said the change made its early-retirement benefits obsolete. But how the airline's retirement benefits rules will be changed is a source of intense friction between the airline and the union.


    A strike by Vereinigung Cockpit would be the fourth union strike this year to hit Lufthansa, which already has had to slash its full-year operating profit outlook because of losses stemming from protests by pilots, security and ground personnel.


    KeplerCheuvreux analyst Ruxandra Haradau-Doser estimated the Germanwings strikes will cost Lufthansa about €10 million ($13.17 million), but by itself probably wouldn't trigger another profit warning at the German flagship carrier.


    The analyst warned on the risk of further walkouts, however, and added talks between the labor union and the airline will be crucial for further business developments.


    Write to Natalia Drozdiak at natalia.drozdiak@wsj.com and Markus Klausen at markus.klausen@wsj.com

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    Air France's Pilot Union Calls for One-Week Strike Next Month


    PARIS— Air France's AF.FR +1.86% main pilot union Thursday called for a one-week strike next month to protest cost-cutting measures the airline is considering on cockpit crew in an effort to return to profit and counter budget-carrier competition.


    The union, SNPL France Alpa, said it wasn't opposed to changes but had been left with no choice but calling for a strike because of what it described as "a complete lack of dialogue" with management.


    "This company urgently needs restructuring," SNPL President Jean-Louis Barber said. "But we should have a say in all this."


    The airline vowed to talk to its pilots. "Negotiations with trade unions have always existed and will continue, notably with pilots unions and especially the SNPL," said Eric Schramm, Air France's executive vice president for flight operations.


    Like many airlines in Europe, Air France, the French arm of Franco-Dutch carrier Air France-KLM SA, is struggling to compete with low-cost rivals such as Ryanair Holdings RYA.DB -1.33% and easyJet EZJ.LN +0.22% PLC, as leisure travelers pull back on spending.


    The airline has succeeded in narrowing losses thanks to a three-year restructuring plan launched in 2012, but it continues to bleed red ink. In the first half of the year, the company posted a net loss of €614 million ($808 million).


    To further rein in costs and recapture market share from budget airlines, Air France has said it was working on a plan to transfer most of its short- and medium-haul services to its own low-cost units, Hop! and Transavia Airlines.


    Air France said it would make detailed proposals to overhaul its short- and medium-haul flights by the end of October. "This new organization should allow clarifying the scope of each of the brands" to guarantee a competitive cost structure, the airline said in a statement.


    Mr. Barber, however, said his union wanted to be involved in crafting this new plan. "We want to talk about it right now," he said.


    The strike threat at Air France comes as German rival Lufthansa LHA.XE +0.11% said it would cancel more than 100 flights Friday because of a labor dispute at its budget unit Germanwings over retirement benefits.


    This will be the fourth union strike this year at Lufthansa, which already has had to slash its full-year operating profit outlook because of losses stemming from protests by pilots, security and ground personnel.


    Write to Noémie Bisserbe at Noémie.Bisserbe@wsj.com

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