Lufthansa Pilot Strikes May Resume on Arbitration Snubs

Deutsche Lufthansa AG is bracing for a resumption of pilot strikes next year after failing to agree on arbitration terms with the Vereinigung Cockpit labor union in a pay and retirement dispute.

Lufthansa offered separate arbitration procedures for retirement benefits and for all other wage issues, hoping to end sporadic walkouts, an official at the Cologne, Germany-based airline said today. The union proposed a single arbitration program for all pay and working conditions, while the carrier said plans for a new low-cost platform are non-negotiable and that some contract points need settlement first.

The dispute is hampering efforts by Lufthansa, Europe’s second-biggest airline, to improve profit with its most ambitions savings program ever. Chief Executive Officer Carsten Spohr cut financial goals twice in four months as the strikes exacerbated the effects of falling ticket prices stemming from wider competition. Lufthansa estimates the walkouts have cut earnings by almost 200 million euros ($246 million) this year.

Passengers are likely to be spared further disruptions from strikes this year following the 10 that have already taken place in 2014, Lufthansa said. It discussed three out of six contract terms with the union this year, and said it’s open to talks on all of them.

The carrier’s plan to bundle low-cost operations for German, European and long-haul flights into a platform dubbed Wings isn’t suitable for arbitration as it’s a strategic business decision, while requirements to discuss it with the union have been satisfied while producing no consensus, Lufthansa said.

Anke Fleckenstein, a Vereinigung Cockpit spokeswoman, declined immediately to comment.

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