October 19, 2015 / 6:14 PM / 3 years ago

Lufthansa, cabin crew fail to reach deal on pension scheme

Passenger planes of German air carrier Lufthansa are parked in and outside a technical maintaining hall at the Frankfurt Airport in Germany, early morning September 9, 2015. REUTERS/Kai Pfaffenbach

FRANKFURT (Reuters) - The latest round of talks between German airline Lufthansa (LHAG.DE) and its cabin crew workers has failed, with union UFO rejecting the German airline’s latest offers as “missing the point”.

The German carrier is currently negotiating with staff from various parts of its business as it tries to cut costs to compete more effectively with low cost carriers and Gulf rivals.

It has said in talks with union UFO, which represents around 19,000 flight attendants, that low interest rates meant it could no longer afford the retirement scheme it has been offering to cabin crew, which cost it 3.7 billion euros ($4.19 billion) last year and allowed workers to retire at the age of 55.

Lufthansa said under the offer it presented on Monday, cabin crew would still be allowed to stop working when they reach 55 but said they could receive significantly higher pensions if they stayed in the job until the age of 65.

In addition, all cabin crew would receive a one-time payment of 2,000 euros each, and those who had been with the company since at least 2012 would also get wage increases by 1.7 percent in 2016 and again in 2017, it said.

Nicoley Baublies, head of UFO, said Lufthansa’s offer did not include important points on job security that the union had demanded and showed that negotiations had “failed completely”.

“We will not continue negotiations. Another extension is not going to help,” he said in a video response posted on the Internet. He said UFO still needed to analyze Lufthansa’s offer in detail before deciding how to proceed.

Talks with UFO nearly resulted in strikes this summer, but the two sides agreed to continue talking, with the aim of reaching an agreement by November.

Lufthansa is also negotiating with pilots, who have staged over a dozen strikes over the last 18 months, the most recent in September before a court called a end to the walkout.

Reporting by Maria Sheahan, editing by David Evans

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