More strikes loom at Lufthansa after talks with pilots fail

Mon Jul 6, 2015 10:52am EDT
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FRANKFURT/BERLIN (Reuters) - Talks between Lufthansa (LHAG.DE: Quote) and pilots' union Vereinigung Cockpit (VC) about taking a pay dispute to mediation have failed, raising the prospect of strikes at the height of the summer travel season, the union said on Monday.

Lufthansa and its pilots have been trying to agree a mediation process to end a long-running pay dispute, which has already caused more than a dozen pilot strikes since April 2014.

The airline is trying to cut costs to ensure it can compete with fast-growing rivals from the Gulf and low-cost carriers. It is also trying to revamp its pension schemes because low interest rates have increased its pension deficit.

The VC union said Lufthansa had not wanted to discuss all disputed topics and that an agreement to hold off on strikes until the end of July was no longer valid.

"A new escalation of the dispute has therefore become more likely," the union said in a statement.

A Lufthansa spokesman said the company regretted the union's move and called on the pilots to re-enter talks.

The dispute concerns retirement benefits that allow pilots to retire at the age of 55 and receive up to 60 percent of their final salary, before state pension payments start at 65.

Lufthansa, which wanted to scrap the scheme entirely, has agreed to keep it for those who joined the company before 2014 but wants to increase the average age of retirement to 61 years of age. It says the current average age of retirement for its pilots is 59.5 years.

The pilots also wanted the mediation to resolve other outstanding issues, including low-cost expansion, regular pay talks and how Lufthansa plans to reduce costs on long-haul flights to tourist destinations.   Continued...

A Lufthansa Airbus A380-800, with Tail Number D-AIMJ, lands at San Francisco International Airport, San Francisco, California, April 16, 2015.   REUTERS/Louis Nastro