Lufthansa and workers' union settle pay dispute

German trade union Verdi has agreed a pay deal with Lufthansa for 33,000 cabin crew and ground staff across the airline group, it said on Wednesday, averting another round of strikes that the union had threatened.Employees of Lufthansa Systems, Lufthansa Cargo and Lufthansa Technik will see their pay rise by 4.7 percent, while Lufthansa AG staff will get a rise of 3 percent, in a deal which runs for 26 months and excludes forced lay-offs, Verdi said in a statement. Lufthansa confirmed that a deal had been reached and said it would contribute to the company's restructuring efforts. Verdi and Lufthansa had been in talks since the end of February and workers on April 22 virtually grounded the airline with the second strike in a month. Analysts estimate that walk-out alone cost Lufthansa more than 15 million euros ($20 million). Two weeks ago Lufthansa offered to raise pay by 1.2 percent from October and by a further 0.5 percent a year later, in a deal with no job guarantees.

Lufthansa management are currently pushing through a cost-cutting plan dubbed SCORE which aims to shed 3,500 jobs worldwide and increase annual operating profits to 2.3 billion euros by 2015 from 524 million last year.

Verdi said on Wednesday the pay rises would occur in two steps, with Lufthansa Cargo and Lufthansa Technik staff getting a 2.4 percent rise from Aug. 1, 2013 and a further 2.3 percent from Aug. 1, 2014.

Lufthansa AG ground crew would receive 1.5 percent rises on both dates, while trainees would see pay rise by 5.2 percent, the union said.

The deal is still subject to the approval of union members by May 14.