Bloomberg News

Lufthansa Reaches Pay Deal With Union to Avert More Strikes (1)

May 01, 2013

Deutsche Lufthansa AG (LHA) struck a deal with the Ver.di union on pay and job security that averts further strike action at Europe’s second-biggest airline.

The agreement, after two days of talks, covers the airline’s ground staff, together with workers at the Lufthansa Systems, Technik and Cargo units, Ver.di said in a statement.

Pay raises of as much as 5.2 percent will take place in two stages, one in August and the other a year later, and will also apply to trainees, according to the union, which said the accord covering 33,000 employees will face a vote on May 14. Employment guarantees are provided for 26 months from Feb. 1 this year.

“Jobs for thousands of Lufthansa employees have been secured,” Christine Behle, who led the negotiations for Ver.di, said in today’s release. “That was particularly important, given the management’s expansive savings program.”

Strikes by employees and airport security guards have grounded Lufthansa flights as it seeks to push through its most ambitious efficiency drive ever. The Cologne-based company aims to lift operating profit to a record 2.3 billion euros ($3 billion) by 2015 via a plan that calls for 3,500 job cuts.

‘Differentiated Pay’

“Through difficult but constructive negotiations we have agreed a fair compromise,” Stefan Lauer, Lufthansa’s lead negotiator, said in a statement. “The labor deal is an important marker in achieving differentiated pay levels within the group.”

Pay at Lufthansa Systems, Technik and Cargo is due to rise 2.4 percent this year and a further 2.3 percent next under the accord. Ground personnel will receive an initial 1.5 percent increase, followed by 1.5 percent more in 2014, with the lower rate reflecting challenges at the airline unit, Lufthansa said.

Employees will forego pay increases in the first six months of the deal as a contribution to the savings program, Lufthansa said. Trainees will see a combined rise of 5.2 percent.

Ver.di effectively idled Lufthansa on April 22 when a full- day walkout of 14,000 workers forced the cancellation of 99 percent of European services. A half-day strike on March 21 had already resulted in the scrapping of more than 760 flights.

Lufthansa shares have advanced 6.6 percent this year, valuing the business at 6.9 billion euros. The German stock market is closed today for a public holiday.

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus