Lufthansa agrees to hike pay for pilots by 8.7%
Airline accepts mediator’s proposal in long-running dispute
German airline Lufthansa said yesterday it had agreed to boost pilots’ salaries by 8.7 percent over four years, hoping to end years of disputes and costly walkouts by air crew.
Pilots’ first pay increase will be backdated to January 1, 2016 and the last is slated for January 1, 2019, while the agreement will remain valid until the end of that year, Lufthansa said in a statement.
The airline said it had accepted the recommendations made by a mediator in a longrunning row over pay with pilots’ union Vereinigung Cockpit, which will add around 85 million euros ($90 million) to its annual costs. The German flagship carrier said the recommendations included pay increases for 5,400 pilots by an overall 8.7 percent in several steps as well as one-time payments worth a total 30 million euros.
Pilots will also receive a one-off bonus payment of between 5,000 and 6,000 euros under the deal, or “around half a month of salary” per person, pilots’ union Cockpit noted in its own statement.
To make up for the added expenses, Lufthansa said 40 new aircraft due for delivery would be staffed not by crew on collective labour agreements at its core brand, but by crew from elsewhere within the group. Lufthansa is trying to cut costs but pilots have walked out 15 times since early 2014 over disputes with management on topics including pay and early retirement, costing the carrier hundreds of millions of euros in lost profits.
Before the mediation process, the pilots had asked for an average annual pay increase of 3.7 percent over a five-year period backdated to 2012, which is when their last collective bargaining contract with Lufthansa expired. The pilots had said altogether these increases would amount to a rise of nearly 20 percent on current pay.
Pilots at Lufthansa, Lufthansa Cargo and low-cost subsidiary Germanwings are all included in the agreement. The deal is “acceptable”, Cockpit spokesman Markus Wahl said in the union’s statement, but must still be approved by members in a vote.
Lufthansa and Cockpit turned to a mediator in December to unravel their intractable pay dispute.
Disruption from the pilots’ latest strike in November cost the firm around 100 million euros-the latest in a series of walkouts that Lufthansa says have inflicted some 351 million euros of costs in total since 2014. While the airline said it was happy with the result, it warned that the additional expense meant the pilots of 40 new aircraft it is adding to its fleet would not be covered by the compromise.
Meanwhile, tough talks are still to come for the two sides as they tackle remaining thorny issues including pilots’ pensions. Lufthansa shares rose on news of the deal, adding 0.93 percent to trade at 12.97 euros in Frankfurt at 1350 GMT, outpacing 0.08 percent gains for the DAX index of leading German shares. —Agencies