MFAG is downsizing

The Central German Airport Holding (MFAG), parent company of Leipzig/Halle and Dresden Airports, is in the red and needs to be restructured. This might lead to job cuts and the cancellation of allowances. The trade union ver.di blames the management for the financial misery. In order to persuade the MFAG bosses to shelve their cost-cutting plans, the union called on airport employees to go on a warning strike which lasted from Thursday afternoon until Friday morning (25-26JAN24). Cargo flights operated by DHL Express, AeroLogic and other freight carriers were not affected.  

The walkout of ver.di  unionists last Thursday and Friday disrupted passenger flights at LEJ, not cargo ops – picture: courtesy  LEJ

“The Central German Airport Holding is a fascinating place for your career,” the management trumpets on MFAG’s own website, eager to attract capable candidates to fill existing vacancies. However, recruiting new staff is currently not listed high on the agenda of its East German airports. Instead, topics like salary and even job cuts prevail.

Downsizing is the current motto.
It is unclear how many of the approximately 1,400 employees at Leipzig-Halle Airport and its smaller sister Dresden Airport, could be affected by job axing. Much will depend on whether the employees reluctantly accept the management’s cost-cutting program dubbed “Z30”.

“They will not!” emphasizes trade unionist, Paul Schmidt. He points out that the starting wage at MFAG is 12.50 euros per hour, which is only 9 cents above the statutory national minimum salary payable to any employee. Conversely, the Management Board recently approved a salary increase of a whopping 26%. “That doesn’t go together: less money and more work for the employees, higher salaries combined with bonuses for the already richly paid board members,” remarks unionist Schmidt indignantly.

The conflict is not just about wage issues
“The management is responsible for steering the business processes; the employees’ job is to do their daily work. For this, they deserve to be paid a decent wage and be part of social programs. The fact that it has not been possible to put the MFAG airports on a solid financial footing despite below-average wages is not the fault of the staff. Instead, the responsibility lies with the Executive Board,” is the trade union’s message. ver.di is demanding a one-off wage increase of EUR 650, followed by an annual percentage salary increase thereafter, with the amount still pending tariff negotiations.

Prime Air came – and exited LEJ again, shortly after
The dispute was preceded by a transformation concept called “Zukunft” (Future), on which auditor KPMG tabled a comprehensive report asked for by banks (around 300 pages), concluding that the planned restructuring of the airport holding company opens promising business avenues for the future despite MFAG’s current deficit of 145 mn euros. This assessment is based on the high growth potential in the areas of logistics and space development as well as moderate growth in passenger volumes – particularly in tourist traffic at Dresden Airport, states KPMG. But the assumptions were already clouded by the exit of Prime Air, which only used LEJ as a hub for a short time.

This put additional pressure on MFAG’s finances. To get out of the red in the long or even medium term, the management is now considering “targeted measures to increase profitability. These include optimizing existing structures as well as streamlining strategic and operational processes,” reads a statement. However, the MFAG executives do not clarify exactly what these measures are.

According to ver.di’s Paul Schmidt, management intends to increase weekly working hours, cut vacation pay and reduce the number of free Sundays from 24 to 21 per year. In return, it offers staff a salary increase of 6.5% over a staggered five-year period.

A strike is looming
This lack of transparency is fueling mistrust among employees, an airport employee told CargoForwarder Global. In any case, the union insists on its claim for a wage raise of 650 euros for every MFAG headcount. Simultaneously, it turns down the extension of working hours or cuts in vacation. The next round of negotiations on collective bargaining and labor law issues, is scheduled for 08FEB24. However, according to information obtained by CargoForwarder Global, strike action is likely to take place before then.

If so, DHL Express, which operates its largest global hub at Leipzig/Halle, will only be affected indirectly at best. And only if the airport fire department joins the walkout or air traffic controllers take solidarity action. However, this is not to be expected.

At the moment, MFAG management and the ver.di union behave like two trains on a collision course – rushing towards each other at high velocity. Hopefully, both sides will still find a way to avoid a total crash which would not only harm the two airports, but also the country’s entire economy.

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