Lufthansa Cabin Crews Back Contract Ending Their Strike Campaign

  • Flight attendants vote in favor of new pay, pension agreement
  • Savings from three-year accord to help airline’s Ebit in 2016

Deutsche Lufthansa AG flight attendants approved a three-year contract to end one of the airline’s long-running disputes over pay and pensions that have led to strikes.

The accord with the cabin-crew union UFO will lead to savings in the mid-double-digit millions of euros in labor costs and reduce pension commitments by a high triple-digit million-euro amount, Lufthansa said Wednesday in a statement. The German carrier expects the lower costs to help boost earnings before interest and taxes this year.

UFO and the pilots’ union Vereinigung Cockpit held a series of strikes in the past two years as disputes over pay, benefits and retirement were exacerbated by concerns about Lufthansa’s strategy of converting its Eurowings unit into a low-cost division. The cabin-crew deal was originally reached in July. Lufthansa’s talks with the pilots ended without result on Aug. 12, though the airline still sees possibilities for agreement, according to a spokesman.

“It’s vitally important to us at Lufthansa that we can now take this path to the future together with our cabin personnel,” Bettina Volkens, Lufthansa’s human resources chief, said in the statement Wednesday.

Lufthansa shares fell as much as 0.7 percent and were down 0.4 percent at 10.68 euros as of 9:16 a.m. in Frankfurt. The stock has dropped 27 percent this year, valuing the airline at 4.97 billion euros ($5.6 billion).

The contract with UFO raises cabin-crew pay by 1 percent as of Oct. 1 and 2 percent effective Jan. 1, 2018, on top of a 2.2 percent increase already provided this year. The retirement plan shifts to a defined-contribution program, which outlines how much is put into an employee’s pension, from a defined-benefit system, which specifies how much a retiree is paid.

Lufthansa also agreed through 2021 not to fire flight attendants should it need to reduce the workforce.

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