Lufthansa, pilots reach agreement through arbitration

Lufthansa and its pilots represented by the Vereinigung Cockpit union last week reached agreement on a new labor contract through federal arbitration, ending a year-long dispute that included a brief walkout by flight deck crew earlier this year.

The one-day pilot strike in February cost LH around €48 million ($59.4 million) as it was forced to cancel 2,000 flights. The union threatened further action before agreeing to arbitration in April. LH and VC, representing the carrier's 4,000 pilots, agreed to accept terms put forward by arbitrator Klaus von Dohnanyi. 

LH said the sides agreed to a salary freeze that will keep pilots' current pay in place through at least March 31, 2011. The union said it accepted the freeze "to ensure Lufthansa's future competitiveness."

In addition, the accord allows LH to operate regional aircraft with up to 95 seats outside the terms of the pilot contract. The previous contract set a 70-seat-aircraft limit. "Under this ruling, more than a fifth of the smallest aircraft in the fleet can be operated by regional carriers outside the terms of the group pay agreement," LH said. "This ensures sustainable development perspectives in the Group's regional traffic segment."

The two sides also agreed "on the minimum level of traffic to be flown by pilots of Lufthansa passenger aircraft in cross-border traffic between the markets of carriers in the Lufthansa airline group," LH said. "On Lufthansa Italia, they reached a solution which will enable the regional airline's ongoing development under country-specific working conditions." VC members still need to formally approve the pact in a vote.