Lufthansa agrees pay hike

German airline Lufthansa today agreed to raise cabin crew pay by 3.95 per cent over a two-year period from January next year under a new wage deal that also promises job security.

The agreement, overseen by a mediator, caps nearly six weeks of negotiations that started on September 12 with trade union UFO insisting on a 5 per cent pay hike.

Lufthansa had offered a 3.5 per cent increase and resisted union demands for guarantees against outsourcing of cabin crew as it tries to slash costs in a plan to improve annual earnings by €1.5 billion by end of 2014.

The airline is planning a wide-ranging revamp in response to cutthroat competition from no-frills airline like Ryanair and Easyjet and Gulf carriers, who have been gnawing into market share of established airlines in Europe.

Lufthansa now agreed to rule out mandatory redundancies of cabin crew until the end 2014.

UFO had staged a series of strikes in early September, forcing Lufthansa to cancel more than 1,000 flights.

The union, representing around 18,000 cabin crew, eventually agreed to arbitration and to a truce, promising not to hold any strikes until the end of November, while mediation was ongoing.

Reuters