Lufthansa (LHAB) (LHA) announced signing collective labor agreements with German Airline Pilots Union Vereinigung Cockpit on December 14, 2017.

Lufthansa (LHAB) (LHA) and Vereinigung Cockpit agreed on a framework collective agreement and a new remuneration agreement as well as agreements on pension and transitional payments lasting until June 2022, the company reported in an official statement. The new contracts will result in a structural overall cost saving of 15 percent of staff costs in the cockpit – before wage increases to be paid in the future. Lufthansa (LHAB) (LHA) and Vereinigung Cockpit also agreed on in the package to operate a minimum of 325 aircraft with pilots from Lufthansa (LHAB) (LHA) , Lufthansa Cargo and Germanwings by the end of 2022. Junior pilots will be employed from the afore-mentioned airlines with immediate effect and should number more than 500 in 2018.

"For Lufthansa (LHAB) (LHA) , it's very important that we are working together with cockpit staff to shape the future of Lufthansa (LHAB) (LHA) ," says Dr. Bettina Volkens, Chief Officer Corporate Human Resources and Legal Affairs. "We firmly believe that the collective bargaining agreements are a good compromise offering attractive elements for our employees and savings for the company".

some of the other agreements are as follows:

  • The pension scheme will be changed from a system of defined benefits to a system of defined contributions, as already agreed with ground and cabin staff. As a result, pension liabilities will be reduced by a high three-digit million euro amount, while EBIT 2017 will improve by a three-digit million euro amount.
  • Pilots at Lufthansa, Lufthansa Cargo and Germanwings will receive staggered pay increases totaling to 10.3% and a one-off payment of up to 1.8 monthly salaries for the period of May 2012 until June 2022.
  • The entry-level and potential final compensations for future employees will continue to be based on today’s current levels. The remuneration structures of current employees remain unchanged. Additionally, further measures have been agreed on in order to increase productivity.

What is left out?

The recent Lufthansa’s (LHAB) (LHA) purchase of bankrupt German carrier Air Berlin (AB1) caused extra tensions in labor relations. After acquiring 3000 pilots from the insolvent carrier, Lufthansa (LHAB) (LHA) intended to transfer them to its low cost subsidiary Eurowings, but the pilot union rejected the labor agreement proposal, refusing the prospects for the airline to promptly take on the former Air Berlin (AB1) staff in November 2017.

Lufthansa (LHAB) (LHA) acquired large parts of insolvent Air Berlin (AB1) in October 2017. Among other agreements, Lufthansa (LHAB) (LHA) also hoped to hire 3000 employees of the insolvent carrier. But Vereinigung Cockpit rejected the transition proposal, saying it  “would not have created binding prospects neither for the pilots of Air Berlin (AB1) affected by the insolvency, nor for the staff of Eurowings," according to  Jörg Handwerg, Member of the Board of the Vereinigung Cockpit.

The union has also been claiming for better conditions for the current Eurowings staff, saying that “[…] Vereinigung Cockpit calls on the Eurowings to acknowledge their social responsibility as beneficiaries of the Air Berlin (AB1) bankruptcy and to offer their employees acceptable terms and conditions. With salary losses of up to 40% and conditions that are well below the level of other companies in the competition, the Vereinigung Cockpit sees this as not given”.