Lufthansa, union resume talks to avert strike

Pay, pensions remain key issues
|labour-reporter.com|Last Updated: 06/29/2015

FRANKFURT (Reuters) — Lufthansa and cabin crew union UFO are holding talks on whether to resume negotiations over pay and pensions in a bid to stave off what could be imminent strikes over the busy summer holiday season.

Lufthansa has been in protracted talks with various staff groups as it seeks to bring down costs and revise pension schemes, to better compete with low-cost airlines and expanding Middle Eastern rivals.

UFO said earlier on Monday its members were ready to talk and Lufthansa Chief Executive Carsten Spohr told journalists he was optimistic that a deal could be reached.

UFO last week threatened its members would strike on July 1 if Lufthansa did not put forward a much better offer on pay and pensions.

Further one-day strikes would follow that could last until Sept. 16, disrupting travel over the lucrative peak summer season, the union said at the time.

The fact the two sides are back in contact does not mean strikes have been averted.

Spohr said the airline needs 24 hours' notice to change flight plans so it was crucial to come to an agreement on the negotiation process with unions by the morning of June 30 at the latest.

The conflict centres around the airline's pension scheme.

Lufthansa has said that low interest rates mean it can no longer afford the retirement scheme it offers to cabin crew.

The costs of the scheme - to the tune of 3.7 billion euros ($4.1 billion) last year - are of particular concern for the airline because cabin crew can take early retirement from the age of 55 due to the strains of frequent flying.

It wants employees to siphon off more of their own salary for pension assets. UFO wants to keep much of the current retirement scheme.

Spohr said the airline wanted to ensure that employees who had been with the company the longest would be least affected by the pension changes.

Lufthansa shares were down 1.1 per cent at the top of a 2.3 per cent weaker German blue chip index, which was hit by the Greece crisis.

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