Lufthansa hammers out cost cutting deal with pilots, sees recovery in 2021

In a statement, German airline Lufthansa stated, it has formulated an agreement with pilots over a package of short-term measures which will reduce it cash burn and losses induced by the Wuhan Coronavirus pandemic.

As per the agreement, in return for job guarantees until at least March 31, 2021, the pilots union Vereinigung Cockpit (VC) has agreed to reduced top-up payments to short-time working benefits as well as cuts to pension benefits through to the end of 2020, said Lufthansa.

Lufthansa went on to add, “it would only be able to avoid redundancies beyond March if it reached a long-term agreement for pilots, including a corresponding cut in working hours and salaries. Lufthansa employs around 5,000 pilots.”

Wage increases that was previously negotiated for this year, would be postponed until January 2021.

In a statement the VC union said, the short-term agreement gave both sides sides time to hammer out a long term deal.

“We clearly reject Lufthansa’s threat to make redundancies for operational reasons. In our opinion, a social partnership must show how resilient it is, especially in bad times,” said VC President Markus Wahl in a statement.

Last week, Lufthansa had put German workers on notice of compulsory layoffs citing a slump in travel and slow progress in union negotiations which brought about a 1.7 billion euros loss in revenues in a single quarter.

In June 2020, the German airlines had received a 9 billion euro government bailout package to secure its future. Last week it said, it expects capacity to recover to around 50% of normal by the end of 2020 and to two thirds of last year’s level in 2021.

Lufthansa’s cabin crew also voted in favour of a deal, said the UFO trade union on Saturday.



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