Hamburg, Mar 01: Management and unions at Lufthansa today said they had finally buried the hatchet in their bitter pay dispute by agreeing to raise the wages of the German airline's 55,000 ground and cabin staff by 6.2 percent over the next 26 months. The deal, brokered by arbitrator Klaus Von Dohnanyi, entailed staggered wage increases over the next 26 months, one-off payments for November and December last year, plus a share of the carrier's 2002 earnings, the two sides said.
The deal will cost Lufthansa 170 million Euros (182 million dollars) this year alone, the airline estimated. Under the terms of the deal, employees would receive a wage increase of 3.2 percent from January 1, 2003.
Wages would then be hiked by a further 1.8 percent on October 1 and then by an additional 1.2 percent from may 1, 2004. For the months of November and December, employees would receive a one-off payment of 250 Euros ($ 268).
In addition, employees would also receive a share of profits equivalent to 1.8 percent of their annual wage.
And an agreement was drawn up regarding measures to be taken to safeguard jobs during times of crisis. These included immediate measures to cut labour costs via flexible working hours.
Lufthansa's personnel chief and chief negotiator Stefan Lauer described the measures as "a classic win-win situation for both the company and its employees".
Bureau Report