According to reports, German air-carrier Lufthansa and a pilots’ union have accepted pay approvals from a negotiator, though the airline said it planned to balance the cost by using more aircrew on low-priced contracts in a move that could threaten the deal.
In the recent times Lufthansa has been dogged by a series of strikes. The company said on Wednesday it had decided to increase pay for 5,400 pilots by 8.7% in several steps, as well as one-time payments close to 30 million euros that will add around 85 million euros or $90 million to its annual budgets.
The deal boosted Lufthansa stock, which were up 1% by 1221 GMT and among the top DAX gainers.
In order to counterbalance an added expense, Lufthansa said 40 new airplane due for delivery would be operated not by crew on combined labor agreements at its core brand, but by crew from somewhere else within the group.
Recently Company’s board member Harry Hohmeister had highlighted the view of shifting new planes to other parts of the group or even introducing a new unit to keep costs down.
Vereinigung Cockpit (VC), which is the concerned Pilots’ union said in a statement that the offers would be put to a vote of members, with a result anticipated by the end of March, but spokesman Markus Wahl said the plans to shift the planes could affect the outcome. “It will be hard for some of our members to accept and it could impact talks over other issues,” he added.
Meanwhile Lufthansa aims to drop costs to compete actively with other rivals such as Ryanair on short-haul flights and Emirates on long-haul routes, but pilots have gone on strikes for 15 times since early 2014 over issues comprising pay and early retirement, costing the carrier hundreds of millions of euros in lost profit.