Germany's biggest airline Lufthansa and its flight attendants have reached a new labor deal that averts the possibility of widespread strikes during the holiday season.
Though employees will not get the pay rises they were looking for, they have been granted certain job guarantees.
"We achieved a workable outcome overall, in which both parties got something, and which at the same time takes into account both the interests of the employee and the employer sides," Lufthansa negotiator Peter Gerber said Tuesday.
The attendants' UFO union and Lufthansa reached the agreement with the help of arbitrator Bert Ruerup late Monday night. Ruerup, a former economic adviser to the German government, was called in to help mediate in September after the union staged a series of short-term work stoppages that caused the cancellation of hundreds of flights and cost Lufthansa millions. That followed the collapse of 13 months of negotiations.
Lufthansa is struggling to compete against European budget carriers and government-owned airlines from the Persian Gulf. It was at odds with UFO over pay and union demands that the airline agree not to outsource jobs or employ temporary cabin crew employees.
In the new deal, UFO, which had been pushing for a 5 percent wage increase over 12 months for 18,000 flight attendants, agreed to a 3.95 percent increase, including a rise in base pay rates; in addition, employees will get a one-off payment of €360 ($458). Lufthansa had originally been offering a 3.5 percent rise over 36 months.
UFO also signed off on other concessions, including allowing the airline to offer new employees different lower-cost contracts.
In exchange, Lufthansa guaranteed that there would be no layoffs through at least Dec. 31, 2014, and agreed that any employees who moved over to work for the airline's budget Germanwings subsidiary would remain Lufthansa employees.
Lufthansa last month reported that profit jumped 30 percent in the third quarter despite the strikes and higher fuel prices, but CEO Christoph Franz warned the company would still need to get leaner to deal with multiple challenges in the airline industry.