Lufthansa, union reach wage deal to end strike

FRANKFURT/GERMANY: Lufthansa reached a wage agreement with the ver.di union, signaling an end to a strike that led to numerous flight cancellations and delays, the airline and union said on Friday.

``The strike is over,'' said Stefan Lauer, a member of Deutsche Lufthansa AG's management board and the airline's lead negotiator, at a news conference.

Ver.di negotiator Erhard Ott said the strike, which began Monday, would end on Saturday.

He said the agreement came through ``difficult and agonizing'' but informal talks between him and Lauer that stretched late into Thursday night.

The union said its tariff commission would advise its members of the decision with the aim of stopping the walkouts on Saturday morning.

He said that the Cologne-based airline, Germany's biggest, had agreed to a 5.1 percent pay rise, retroactive to July 1, for members of the ver.di union, which is largely comprised of ground staff. That will be followed by another raise of 2.3 percent on July 1, 2009.

The deal also includes a one time payment _ dependent on specific divisions' earnings within the company _ of up to 2.4 percent of the total of a year's contract. The new contract runs until the end of February 2010.

Viewed on a fiscal basis, the increase means about a 4.2 percent pay raise per employee, per year.

The company said the increase would cost the airline about euro40 million (US$60 million) for the remainder of this year and euro100 million (US$155 million) next year.

The strike forced the airline to cancel a number of flights, largely on domestic and European routes, though flights to destinations in the U.S., Canada and India also were affected.

The company has not said what the total financial effect of the strike would be, but said Friday that the pay settlement came at the hilt of the bearable limit.

``It is certainly not painless for either side,'' Lauer said. ``It is, all in all, only acceptable in view of the duration of the settlement and the performance-related one-off payment. It is imperative, however, that the increased costs be compensated by higher productivity. Resolution of the pay dispute on their own initiative by Lufthansa and ver.di is an important message to our customers as well as our staff and to Germany as an economic base.''

He said that Lufthansa would go to ``every length to resume flight operations quickly for our customers in the customary reliability and quality.''

A similar offer for cabin crew, including flight attendants, is in the offing, but will take into account the working condition differences between ground and cabin staffs, Lufthansa said.

That deal ``...is, however provisional on pay parity for cabin crew staff and pending agreement between Lufthansa, ver.di and UFO, the flight attendants' union,'' the statement said. Some of the cabin staff belong to the ver.di union, though the bulk of flight attendants at the airline belong to the UFO union.

The pay agreement with UFO expires December 31 2008. Shares of Lufthansa were up nearly 1 per cent to euro14.91 (US$23.28) in Frankfurt trading.