Lufthansa, pilots agree wide-ranging deal on pay, pensions

[BERLIN] Lufthansa and its pilots' union have reached agreement on a wide-ranging labour contract, including pay rises, changes to pension schemes and job creation, bringing an end to years of wrangling and strikes, the two sides said on Wednesday.

The agreement on pensions and early retirement payments will boost the company's profit in 2017 and reduce its pension liabilities by a high hundred-million-euro amount, it said in a statement.

In exchange, management has agreed that at least 325 of its planes will be staffed by pilots on the new collective agreement, which runs until June 2022, and to create jobs for prospective captains. "This agreement on a wide-ranging solution offers a major chance to settle the pay conflict that has been going on for years," a spokesman for union Vereinigung Cockpit said in a statement.

Lufthansa has long been seeking ways to bring costs down as it battles leaner Gulf carriers on long-haul and fast-growing low cost rivals on short-haul routes.

However, those efforts had led to repeated strikes by pilots' union Vereinigung Cockpit, representing around 5,400 pilots at its Lufthansa, Germanwings and Cargo units.

Shares in Lufthansa rose 1 per cent, outperforming other top German companies.

The pilots will join other key Lufthansa staff in moving to a defined contribution pension scheme, while they have also agreed to gradually increase the age at which pilots can claim early retirement payments to 60 years.

Current and new employees have agreed to productivity increases, the carrier said.

The pilots will receive a pay increase of 11.4 per cent for the period from May 2012, when their last collective contract expired, until June 2020, plus a one-off payment equivalent to 1.8 times their monthly salary.

REUTERS