Lufthansa and striking employees union reach agreement

Lufthansa and the ver.di union, representing most of its 34,000 ground  employees, have settled a pay raise issue, which resulted in strike actions throughout Germany last week. Under the agreement, employees will receive a wage increase of 5.1 per cent effective from 1 July retrospectively and an additional 2.3 per cent, effective 1 July 2009.

There also will be a one-off payment of up to 2.4 per cent of each individual's annual compensation.

According to Lufthansa the settlement signifies an effective raise of 4.2 per cent each year. It will remain effective till 28 February 2010.

The union had been asking for a 9.8 per cent increase over the same 21 month period.

Executive board member-human resources, Stefan Lauer, said the deal was acceptable only "in view of the duration of the settlement and the performance-related, one-off payment." He also said that it was "imperative. . .that the increased costs be compensated by higher productivity."

The airline cut its schedule by approximately 10 per cent as a result of last week's walkouts, cancelling 130 flights on Friday. It said it will take approximately two weeks to normalize the schedule.