Luftscamsa - Lufthansa Prioritizes Dividends Over Labor Inflation Adjustments

Lufthansa Group has continued its policy of dividend payments to shareholders and executive board members despite maintaining that it lacks the financial capacity to meet labor demands for inflation adjustments. The redistribution of capital occurs while the carrier’s workforce manages a significant gap between wages and current costs of living. Labor negotiations have remained at an impasse since 2023, while management projects high profitability for the current fiscal year. Mr. Michael Niggemann, the head of human resources at Lufthansa, criticized recent industrial action during a press briefing. He said the “escalation is completely unnecessary” and the company has no “financial leeway” to meet employees’ demands. This assertion of fiscal constraint stands in direct opposition to the group’s financial records. Since 2024, the airline has consistently authorized dividend payouts following a return to profitability after the global pandemic. Management recently celebrated the high profitability of its so-called Billionaire’s Club. This internal classification refers to business units generating over one billion euros in annual earnings. The resumption of dividends includes payouts to members of the executive board who hold company stock. This capital allocation strategy prioritizes investor returns over the stabilization of the primary flight operations workforce. Luftscamsa has found that pensions for many employees have not been adjusted since before the period of high inflation in 2022 and 2023. German inflation rates surged to over 8 percent during that time, which severely reduced the real value of these benefits. As reported in [Lufthansa Core Airline Operations Grounded](/en/alert/h1hMX9yN_lufthansa-core-airline-operations-grounded-this-thursday-following-union-walkout), the ongoing labor conflict centers on the airline's transition toward lower-cost platforms. Management has increasingly moved capacity away from the mainline core to entities with less favorable labor conditions. The growth of the Lufthansa City Airlines subsidiary is a key component of this strategy. This entity allows the group to bypass established collective bargaining agreements by using a separate Air Operator Certificate. Union leaders from the Vereinigung Cockpit and UFO have argued that the carrier is intentionally manufacturing a fiscal crisis. They said the airline is prioritizing profit margins and shareholder returns over the long-term reliability of the brand. Under EU Regulation 261/2004, a strike by the carrier’s own staff is not considered an extraordinary circumstance. The airline remains legally obligated to provide re-routing and financial compensation for disruptions resulting from industrial action. Mr. Carsten Spohr, the Chief Executive Officer, noted that the mainline fleet’s costs are no longer sustainable. He said the group must adapt its labor costs to remain viable against budget competitors. The carrier continues to benefit from structural subsidies; these include the exemption from kerosene taxes on international flights. These fiscal advantages have not translated into wage stability for the workforce or lower costs for consumers. Shareholders recently attended the virtual Annual General Meeting where the board emphasized the importance of attractive returns. This focus on shareholder value appears to supersede the resolution of domestic labor disputes and operational reliability. Independent financial analysts have noted that the airline's cash reserves are sufficient for the proposed payouts. This liquidity suggests that the refusal to adjust wages is a strategic choice rather than a financial necessity.

Lufthansa Aviation Center near the Frankfurt airport, Hesse, Germany (CC-BY-SA-3.0, Norbert Nagel / Wikimedia Commons)

Consumer price index 2020-2026; Statistisches Bundesamt