Morning Briefing Global Edition Lufthansa’s Cheap Seats

Lufthansa employees feel the burn of higher ticket prices and less seating capacity compared to the carrier's budget airline, and British euroskeptic leader Nigel Farage wants his life back!
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Bosch is struggling to grow amid fallout from Volkswagen’s diesel emissions scandal. In 2015, the German auto parts maker generated €70 billion in sales, but expects tepid growth this year as legal actions over its alleged complicity in VW’s software manipulation – which Bosch denies – cloud its outlook. But with €14.5 billion in cash on hand, Bosch has just the right missing part to restart its profit engine, which produced €3.5 billion last year.

 

The government leaders of west Balkan nations met in Paris with French President Francois Hollande, Chancellor Angela Merkel and European Commission President Jean-Claude Juncker. Their agenda is quite the opposite of the British – these countries want to join the European Union. Merkel must keep the door open to these E.U. wannabes, but needs to play for time in the wake of Brexit. Sometimes less can be more. And more can be less.

 

In Act II of Britain’s ongoing political theater, leading euroskeptic Nigel Farage resigned yesterday as head of the right-wing populist UKIP party. Farage said he suffered from stress, and “wants his life back.” If he needs a new motto, since “Take Back Our Country” is now retired, he may consider the headline given him by Der Spiegel: “When the Going Gets Tough – Quit!”

 

But George Osborne is just getting started. The British finance minister is doubling down since his country voted to leave the European Union. If he can pull jobs and investment to Britain with rock-bottom corporate taxes, low social welfare costs and a deregulated financial industry, he could emerge the winner. Harvard Professor Kenneth Rogoff says Osborne’s all-in gambit could pay off in spades: Brexit could be a royal flush for Great Britain.

 

But truth be told, nothing can beat the political theater in the United States this election season. Hillary Clinton will campaign for the first time today with Barack Obama in Charlotte, North Carolina. Donald Trump will campaign a few hours later in the same state. Ostensibly about Democrats vs. Republicans, this race is about insiders versus outsiders. And hard as it is to believe, Trump – the New York real estate tycoon – is running as the Beltway outsider. That is a supreme make-up job on a par with Dustin Hoffman’s in “Tootsie.’’

 

Lufthansa CEO Carsten Spohr presented interim results from his “7 to 1” efficiency program yesterday in Frankfurt. His ode to cost-savings boosted the airline’s share 4 percent. But for unions, Spohr’s success spells trouble: Seating capacity at Lufthansa’s discount carrier Eurowings grew 20 percent; at union-heavy Lufthansa, only 2.5 percent. Why? Costs at Eurowings are 40 percent less than at Lufthansa. For Lufthansa workers, the message is clear: High ticket prices burn passengers as much as the summer sun in Mallorca.

 

Image of the Day

Icelandʼs footballers received a heroesʼ welcome on returning home yesterday following their astonishing run to the quarterfinals in the European championship in France. In the first major tournament ever for the island of 330,000, Iceland finally lost 2-5 to France on Sunday.