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China and pilots threaten Lufthansa Cargo

FRANKFURT: Lufthansa Cargo says the US$2 trillion drop in the value of China's stock market since mid-June is going to impact its business.

The company reported carrying 811,000 tons of freight and mail for the first six months of 2015 – up 0.5 percent over the same period last year. However sales in Asia-Pacific declined 3.2 percent as tonnage fell 1.3 percent and the overall load factor fell 2.5 percent to 67.6 percent, compared to 2014.

Commenting on the continuing instability of China's stock market, airline CEO Peter Gerber was reported as saying: "That's a medium earthquake. If this shows through, airfreight will be the first to notice."

lufthansa cargo centerThe slowdown in Asia comes as mediation talks between Lufthansa and the German pilot's union Vereinigung Cockpit (VC) have broken down – leading to the prospect of more strikes during the summer travel season, according to the union. The dispute has prompted more than a dozen walkouts since April 2014 at an estimated cost to the airline of US$332 million.

Currently, Lufthansa pilots can retire at 55 and receive up to 60 percent of their final salary before state pension payments start at 65. The company says it wants to increase the average retirement age from 59.5 years to 61. The VC union doesn't agree.

Meanwhile in a related announcement, Air France KLM continues to see an erosion of its cargo business with a 9.7 percent drop in revenue tonne-kilometers, and a four percent drop in overall load factor to 64.0 percent, for the first six months of 2015. Unlike Lufthansa however, the result coincides with an "historic" agreement between KLM and its pilot's union that will see a rise in retirement age from 56 to 58 by 2019.

"This agreement represents a significant leg of the journey towards creating a more competitive and healthy KLM. It contributes concretely towards achieving our Perform 2020 objectives. I am pleased with this agreement because all the respective parties displayed flexibility and a willingness to join forces with the KLM management board to build a new KLM," said Pieter Elbers, KLM president & CEO.

Commenting on the breakdown of mediation talks with Lufthansa, the VC union claimed the airline's offer of an overall settlement had turned out to be nothing more than a " short-term tactical maneuver".

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