Deutsche Lufthansa's namesake brand took a step toward ending a pay dispute with pilots, sparing the German airline’s customers strikes over the Christmas holidays.
The Vereinigung Cockpit pilots union said Friday that it agreed to arbitration, with a target of reaching a wage agreement by the end of January. No strikes will be called during the process, after six days of walkouts in November that led to 4,500 flight cancellations and cost Lufthansa about €100 million.
“I am confident that we will be able to develop a fair solution with the assistance of a mediator,” Bettina Volkens, Lufthansa’s head of human resources, said in a statement. “We want to arrive at a long-term industrial peace in cooperation with Vereinigung Cockpit.”
While the talks will enable Lufthansa’s mainline passengers to travel without disruptions from walkouts during the busy holiday season, the company has yet to gain full employee backing for its spending-cut plans. The arbitration focuses solely on pay, leaving a dispute over pilots’ pensions unresolved. At the Eurowings low-cost brand, which is key to Chief Executive Officer Carsten Spohr’s strategy, cabin crew union UFO threatened on Friday to renew strikes after refusing to co-sign a deal the unit reached with rival union Ver.di.
Strikes have cut more than €500 million from Lufthansa's operating profit since Spohr took the CEO post almost three years ago, and have contributed to three reductions in earnings targets. While the pilots held strikes over wages in November, walkouts during 2014 and 2015 were to protest the company’s plans to curb early retirement benefits. Pension issues remain unsolved, and the parties must also work out disputes related to career paths within the group.
Eurowings and German service-employees union Ver.di agreed earlier this month on pay raises for flight attendants in Dusseldorf and Hamburg of 2.5 percent this year and again in October 2017, and an additional 1.25 percent as of October 2018. UFO, which has led the negotiations in the past, said Friday that the contract falls short of its demands. A UFO-organized walkout on Oct. 27 caused the division to scrap 380 flights.
News by Bloomberg, edited by Hospitality Ireland
