New Setback for Berlin Airport; Lufthansa Strike; Signs of Recovery; European Markets Up; Peugeot's Problems; Euro Makes Gains
FOSTER: Another setback for Berlin's troubled new airport. Authorities confirmed that Berlin Brandenburg International won't greet passengers until October of next year. It had been expected to hope its doors back in 2011, and then again this past June, but fire safety and construction issues have caused repeated delays. As a 24-hour walkout by Lufthansa cabin crew continues, the airline has met some of the union's demands. It says it will stop deploying outsourced cabin crews in Berlin for now. It'll also offer permanent contracts to flight attendants recruited through a company called Aviation Power. Pay is still a sticking point, though. The UFO union is asking for a 5 percent pay rise for cabin crew. Lufthansa has offered 3.5 percent if staff work longer hours. Now, the strike has led to the cancellation of around half of Lufthansa's flights this Friday, and from Berlin, here's a report from CNN's Diana Magnay.</s>DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT (voice-over): A third day of strike action by cabin staff, Lufthansa forced to cancel two thirds of Friday's 1800 flights, with walkouts at all its German hubs.</s>MAGNAY (on camera): But Berlin's Tegel Airport is, if anything, quieter than normal. Lufthansa says it's managed to reach 55,000 passengers -- that's around half of all those affected -- by e-mail or text to warn them about changes or cancellations, and it looks like the rest checked online before risking the airport.</s>MAGNAY (voice-over): And despite the strike, between a third and half of all European connections are up and running, thanks to Lufthansa's network of partner airlines.</s>UNIDENTIFIED MALE: We are lucky devils. We have our flight. We are going to Nice. To France.</s>MAGNAY (on camera): OK. And Lufthansa's still flying you there?</s>UNIDENTIFIED MALE: Yes -- I believe not. It's a Swiss company.</s>MAGNAY: Ah.</s>UNIDENTIFIED MALE: They arranged something with Swiss Air.</s>MAGNAY (voice-over): Lufthansa and the UFO union, which represents its 18,000 cabin staff, have been arguing over wages and pay structures for 13 months.</s>KLAUS WALTHER, SPOKESMAN, LUFTHANSA (through translator): Today's strike by the UFO union affects more than 100,000 German Lufthansa clients, and we regret this very much. In our view, this strike is unnecessary, and we call on the union to return to the negotiating table at once.</s>MAGNAY: Lufthansa hopes to cut costs by almost $2 billion by the end of 2014 and faces stiff competition from low-cost carriers in Europe, alongside escalating fuel prices. The union says this puts unfair pressure on its members.</s>NICOLEY BAUBLIES, UFO UNION (through translator): There is a huge solidarity for cabin crew within Lufthansa. Clearly trying to push through cost-cutting measures, like this, means that Lufthansa is breaking apart internally.</s>MAGNAY: But Lufthansa cabin crew still earn almost twice as much as their peers at carriers like Air Berlin. Some passengers said they weren't wholly sympathetic to the unions' demands.</s>KAREN GATZKE, PASSENGER: I think what they offered is not that bad, to tell you the truth, and there's so many people who cannot go on strike.</s>MAGNAY: The union says it doesn't plan on further strike action, but with staff cuts, a large part of Lufthansa's cost-saving program, this dispute may drag on Diana Magnay, CNN, Berlin.</s>FOSTER: Well, there are signs that Europe is on the road to recovery, though. In the UK, government figures show industrial output rose at its fastest pace in 25 years. It was up by 2.9 percent in July, following a drop of around 2.5 percent back in June. In Germany, back to Germany, a similar story. Its industrial output rose by 1.3 percent in July. It fell by around half of one percent back in June. And Europe's stock markets ended the session with modest gains today, but at least they were gains, up between 0 and 1 percent. Mining and banking shares were some of the top performers today. Anglo-American gained more than 7 percent in London, and Societe Generale and Barclays gained almost 7 percent. Looking at the numbers over the course of the week, well, this is the picture. You can see it's been a very, very positive picture for Europe. German and French shares, the main indices, at least, up more than 3 percent. Big numbers. Peugeot Citroen was one of the biggest gainers, actually, on the CAC today despite a rather major fall from grace. Now, last night, the CAC 40's technical board decided to kick the company out of the index and it'll be replaced by a plastic and chemical company, Solvay, later this month. It has been a very rocky road, you could say, for Peugeot. European car sales have actually fallen by 25 percent since 2007, and it's expected that European sales will shrink by 8 percent in 2012. There's been an exposure, really, for this company to those crisis-hit countries we keep talking about in the eurozone, those euro countries at the heart of the slowdown here in Europe. Mounting losses for the company, cash, they're burning through that at a rate of $250 million each month. $4.8 billion has been given to them in state aid. Is this the end of the road, then, for the company? Well, we're going to have to go to the figures, really, for that. First half losses for the company amount to $857.5 million, and it's facing stiff competition. That's the problem here. Peugeot's half-year sales fell 13 percent. Renault only fell 3 percent, but Volkswagen, well, up 10 percent. That's the picture. Now, an auto-related Currency Conundrum for you, because we want to stay topical. Which old US dollar bill featured the image of a car parked outside the Treasury? Was it the A, the $10 bill? The $20 bill for B? And C, the $50 bill? We'll have the answer for you a bit later in the program for you. The euro is making gains against the dollar, thanks to those encouraging numbers on industrial production. The yen is gaining strength against the dollar.