Lufthansa accepts arbitration settlement

The Lufthansa Executive Board has accepted the recommendations put forward at arbitration by former Federal Minister Dr. Klaus von Dohnanyi in the pay dispute with the Vereinigung Cockpit pilots’ union, ending year-long negotiations. The settlement contains rulings on pilots’ remuneration and the collective bargaining agreement. Agreement was also reached on interpretation and implementation of the so-called Group wage agreement. The successful outcome ends years of dispute on controversial issues between the two sides.  

The two sides agreed to a salary freeze, under which the existing pay agreement will be re-concluded to last without change for 24 months until 31 March 2011. The arbitration settlement will also significantly ease the costs the airline incurs in direct traffic outside the Lufthansa hubs.  

As regards the interpretation and implementation of the Group wage agreement, the arbitration ruling contains sustainable solutions allowing Lufthansa to position itself commensurately in a difficult competitive environment. In the regional segment, the previous 70-seater ruling is to be replaced by a 95-seater norm and augmented by a dynamic clause. Under this ruling, more than a fifth of the smallest aircraft in the fleet can be operated by regional carriers outside the terms of the Group pay agreeement. This ensures sustainable development perspectives in the Group’s regional traffic segment. The two sides agreed on the minimum level of traffic to be flown by pilots of Lufthansa passenger aircraft in cross-border traffic between the markets of carriers in the Lufthansa airline group. On Lufthansa Italia, they reached a solution which will enable the regional airline’s ongoing development under country-specific working conditions.

Lufthansa’s chief negotiator, Dr. Roland Busch, Member of Lufthansa German Airlines Board, Finance and Human Resources, said: “As always at arbitration, both sides have had to make concessions. At drawn-out and intensive talks, we have come to a sustainable settlement, which demands much from us but which also offers a high measure of reliability. We expressly appreciate the concessions made by the Vereinigung Cockpit pilots’ union on remuneration, which will make a major contribution towards lastingly reducing costs at Lufthansa. In that sense, this forward-looking settlement is sending an important signal charting the Group’s future direction. The onus now is to look ahead, to accept the challenges posed by the market and further strengthen the mutual trust between the airline and our highly professional pilots in a spirit of partnership.”

Dr. Roland Busch thanked Dr. Klaus von Dohnanyi for his commitment during the arbitration proceedings: “His perseverance and sagacity took mediation to a successful conclusion. He was a fair broker between the two sides at all times and took both their interests into account in his recommendations.”