Germany’s Largest Airline, Union Strike Pension Deal

Ending the longest strike in its history, German airline Lufthansa and its cabin crew union have agreed to pay and pension scheme changes for 19,000 staff. The agreement will allow the carrier to reduce staff costs and move forward with its budget plans.

Some employees will be moves into a defined-contribution plan.

Reuters elaborated on the deal:

The new cabin crew deal, negotiated by a mediator, includes a pay rise of almost 5.5 percent from Jan 2016 to June 2019, plus a one-off payment of 3,000 euros ($3,344), which has already been paid. Lufthansa ruled out compulsory redundancies for five years.

Among the 20 different contracts agreed via a mediation process was the agreement of a defined contribution pension scheme rather than a defined benefit scheme, in line with what many other major European companies have done.

Overall, the agreement, which also includes flexible contracts to better cover seasonal demand, will allow Lufthansa to bring staff costs for cabin crew down by about 10 percent compared to previous projections, Bettina Volkens, Lufthansa board member for HR, told journalists.

Lufthansa, however, still has an ongoing dispute with its pilot union Vereinigung Cockpit but is also currently in talks with them for a new defined contribution pension plan.

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