April 4 (Bloomberg) -- Deutsche Lufthansa AG rejected demands by a pilot union for a sweetened offer in a dispute over retirement benefits that led to the worst strike in its history.
“At this point, we will not make a new offer,” Kay Kratky, chief operating officer of Lufthansa’s German passenger airline, said at a briefing in Frankfurt today. “We will resume talks in the next days, based on the offer we have made, which in our view has enough substance to allow for a solution.”
Lufthansa is risking deadlock with pilots who concluded a three-day strike that wiped out 3,800 flights and say a better offer is required for fresh talks. Europe’s second-largest airline estimates lost revenues and the cost of changing customer travel plans and accommodating crew stuck abroad will wipe about 50 million euros ($69 million) from operating profit.
The union wants the airline to continue paying early retirement benefits for about 5,400 pilots. The carrier aims to push the average retirement age from 58 years to 61 years and reduce benefits for younger pilots to contribute to a savings effort designed to lift operating profit to 2.65 billion euros ($3.65 billion) by next year.
Since the beginning of the walkout on April 2, Lufthansa shares have gained every day, rising as much as 55 cents, or 2.8 percent, to 20.23 euros today, the highest since Nov. 2007.
“The financial markets notice how hard a company works to achieve restructuring,” Kratky said. “I can imagine they view our goals and measures, including changes to remuneration systems, as necessary and adequate.”
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