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Business

Pay Hike Puts End to Strike at Lufthansa

Lufthansa officials said the airline would need until mid-August to normalize its schedule after reaching a deal to end a strike by the Verdi services union. The five-day strike kept hundreds of planes from taking off.

A Lufthansa plane during take off seen against a blue sky

Lufthansa schedules probably won't be back to normal until mid-August

Lufthansa said in addition to a one-time payment, it would increase ground personnel's pay by 5.1 percent retroactively to July 1. The deal, which lasts 21 months, also calls for an additional 2.3 percent pay hike in July 2009.

The airline had earlier said it was cutting 128 flights from its regular schedule Friday, as it had done on Thursday, in response to the strike by ground and cabin staff. Verdi said the strike would end with the early shift on Saturday.

Lufthansa said it be two weeks until it is able to return to a normal flight schedule as the ground crew strikes led to a backup in plane maintenance. Over the next four days 90 percent of European flights would take off, the airline said on its Web site. The company estimated that the agreement would cost the airline 100 million euros ($156 million) in its second year.

Not all expectations met

A Lufthansa plane takes off from Dusseldorf Airport

One expert said the deal was fair to both the union and the airline

"It is clearly not a painless outcome for either side," Lufthansa human resources chief Stefan Lauer told reporters at press conference in Frankfurt. "(But) the fact that we were able to resolve the wage conflict internally sends an important message to our passengers and also to our staff and about Germany as a place to do business."

The strike cost Lufthansa tens of millions of euros, Lauer said, according to Germany's Der Spiegel newsmagazine.

Verdi's head negotiator, Erhard Ott, said the "results will not meet all expectations." He also said the trade union was "ready to leave the table several times" during negotiations.

A trade union expert at the German Institute for Economic Research, Hagen Lesch, said he found the compromise to be fair to both side.

"If you include the one-off payment, the wage agreement is higher than that in many manufacturing sectors," he told Der Spiegel's online edition. "Compared to other service-sector deals, Verdi is in the upper tier with this one."

Official talks broke down three weeks ago, and Verdi balloted its members, securing more than 90-percent support for an unlimited strike that began Monday.

Verdi had demanded 9.8 percent more pay over a 12-month contract for 50,000 workers. Lufthansa's had earlier offered 6.7 percent over a 21-month contract, plus a one-off payment.

More German strikes to come?

Flight attendants waving from stairs leading onto a Lufthansa plane

A second flight attendant union wants a bigger raise when it negotiates in 2009

A second union representing flight attendants, the UFO, criticized Friday's deal as being too low.

"We want a considerably larger increase for flight attendants," UFO negotiations leader Joachim Mueller told reporters.

UFO, whose current contract with Lufthansa runs until the end of 2008, has demanded a 15 percent pay raise -- more than double the Lufthansa-Verdi compromise.

The WSI economic research institute, which is traditionally close Germany's trade unions, said there was a growing willingness among German employees to lay down their work.

"Wage talks have become much tougher" in a country known for relatively harmonious relations between management and labor, WSI expert Heiner Dribbusch told the AFP news agency. "Employees are more ready to mobilize now."

The Federal Labor Office, which keeps track of industrial action, said there had been more strike days in Germany since 2006 than in the decade before.

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