Lufthansa, Cabin Crew Union Arbitration to Run Through June

  • Flight attendants to receive 2.2% pay increase for 2016
  • Cabin crew walkouts prevented during arbiration period

Deutsche Lufthansa AG will avoid another strike by flight attendants at least until the middle of this year after agreeing on an arbitration timetable with their union, sending the shares up as much as 4.2 percent.

Negotiations with the UFO union began on Jan. 19, and pay raises have been set for 2015 and most of 2016, the airline said Friday in a statement. The parties are closer to a deal on retirement benefits and plan to complete missing details by Feb. 15, while discussions also span issues not formally part of the contract.

The truce illustrates an improvement in relations between the union and Europe’s third-largest carrier. For the time being, it also means less risk to travelers’ schedules following on-and-off walkouts by pilots and flight attendants over the past two years that has cut profit by about 500 million euros ($542 million).

Flight attendants will receive a one-time payment of 3,000 euros and a raise of 2.2 percent for 2016. The carrier and the union will also discuss compensation following the Sept. 30 expiration of the new agreement.

Lufthansa jumped to 14.44 euros, the highest intraday price since Jan. 13, and was trading up 2.1 percent as of 11:48 a.m. in Frankfurt. That pared the stock’s decline this year to 2.9 percent.

The airline and UFO agreed in November to arbitration led by Matthias Platzeck, a former chairman of Germany’s Social Democratic Party, following a record seven days of walkouts. Disputes center on terms for early retirement and pensions. An earlier arbitration effort failed in mid-2015.

The German company agreed in November with the Ver.di union representing ground and maintenance workers on terms for pensions. Discussions with pilot continue.

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