Lufthansa, Struggling With Labor Issues, Concedes To Wage Hike Demands

 

German airline company Deutsche Lufthansa AG reportedly reached an agreement with trade union Verdi Saturday, to increase wages along with a one-time payment of 2,250 euros ($2,383.3) to about 30,000 ground staff. The airline also announced that it would ensure all workers receive their employer-funded pension plans.

Lufthansa agreed to increase the wages of its workers at Lufthansa-Systems, Lufthansa-Service GmbH, Lufthansa Technik and Lufthansa Cargo by 2.2 percent on Jan. 1, 2016, while all its employees will receive the one-time payment. Trainees with the airlines will receive 600 euros ($635.6), according to reports.

Germany’s largest carrier, which has been buffeted by competition from Persian Gulf-based carriers on its long-haul routes, was affected by a seven-day strike earlier this month -- the longest in the company’s history -- which saw some 4,600 flights cancelled, affecting about half a million passengers. The clash between the airline and its employees comes as the company tries to rebrand its Eurowings division into a low-cost carrier, to compete with rivals like Ryanair Holdings Plc and easyJet Plc.

Saturday’s agreement, however, does not signal an end to Lufthansa’s labor woes as the airline is embroiled in separate disputes with pilot and cabin staff unions.

Lufthansa is yet reach an accord over retirement benefits with the Independent Flight Attendant’s Organization (UFO), a union of cabin crew members. Earlier this week the UFO called off a planned strike after the two sides agreed on certain points on how to resolve a long-simmering dispute over early retirement plans.

Lufthansa has invited all major unions representing its staff to a summit to discuss labor issues on Dec. 2, and the UFO has reportedly deferred its strikes until after the meeting.