(Corrects year in final paragraph to 2022 from 2020)
* Settles row over pay contracts dating back to May 2012
* Dispute had led to strikes
* New collective deal runs until 2022
* Pensions changes to boost Lufthansa profit this year
BERLIN, March 15 Lufthansa and its
pilots' union have reached agreement on a wide-ranging labour
contract, including pay rises, changes to pension schemes and
job creation, bringing an end to years of wrangling and strikes,
the two sides said on Wednesday.
The agreement on pensions and early retirement payments will
boost the company's profit in 2017 and reduce its pension
liabilities by a high hundred-million-euro amount, it said in a
In exchange, management has agreed that at least 325 of its
planes will be staffed by pilots on the new collective
agreement, which runs until June 2022, and to create jobs for
"This agreement on a wide-ranging solution offers a major
chance to settle the pay conflict that has been going on for
years," a spokesman for union Vereinigung Cockpit said in a
Lufthansa has long been seeking ways to bring costs down as
it battles leaner Gulf carriers on long-haul and fast-growing
low cost rivals on short-haul routes.
However, those efforts had led to repeated strikes by
pilots' union Vereinigung Cockpit, representing around 5,400
pilots at its Lufthansa, Germanwings and Cargo units.
Shares in Lufthansa rose 1 percent, outperforming other top
The pilots will join other key Lufthansa staff in moving to
a defined contribution pension scheme, while they have also
agreed to gradually increase the age at which pilots can claim
early retirement payments to 60 years.
Current and new employees have agreed to productivity
increases, the carrier said.
The pilots will receive a pay increase of 11.4 percent for
the period from May 2012, when their last collective contract
expired, until June 2022, plus a one-off payment equivalent to
1.8 times their monthly salary.
(Reporting by Victoria Bryan; Editing by Maria Sheahan)