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Lufthansa, cabin crew agree sweeping pension changes, 3.5 yr pay deal

[BERLIN] Lufthansa and its main cabin crew union have agreed a new 3.5 year pay deal for 19,000 staff plus a change in pensions to move away from defined benefit pensions to a defined contribution scheme, as is typical for many other major European companies.

Lufthansa has been trying to cut costs but its plan to revamp pensions and relaunch regional carrier Eurowings as a low-cost carrier ran into resistance from its two main staff groups, leading to repeated strikes and souring relations between management and unions.

The new deal, negotiated by a mediator, will see cabin crew pay rise almost 5.5 per cent from Jan 2016 to June 2019, plus a one-off payment of 3,000 euros, which has already been paid.

The changes to the pension scheme should save Lufthansa around 70 million euros a year, a person familiar with the talks said.