Lufthansa Reaches Disaster Deal With Union To Reduce Prices

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BERLIN: German airline Lufthansa mentioned on Wednesday it had reached a brand new cope with commerce union Verdi to chop 200 million euros (£178 million) in prices in return for making no obligatory redundancies in 2021.

Lufthansa warned final week it might burn via extra cash within the fourth quarter than within the third and that additional restructuring measures would weigh on its outcomes because it struggles to deal with the results of the COVID-19 pandemic.

The airline and its subsidiaries, Eurowings, Swiss, Austrian and Brussels Airways, are slashing their schedules, fleet and employees, with air journey not anticipated to recuperate to pre-pandemic ranges earlier than 2025. It goals to chop 22,000 full-time jobs.

“We now have taken a primary necessary step in direction of lowering floor employees personnel prices,” HR head Michael Niggemann mentioned in a press release. “Nonetheless, we can’t decelerate our efforts in persevering with to work on crisis-management measures.”

The cope with Verdi comes after months of talks that had been repeatedly damaged off. Verdi accused the corporate of in search of to chop jobs even after it took a 9-billion-euro authorities bailout.

Lufthansa mentioned 24,000 floor employees would forgo their normal Christmas bonuses in 2020 and 2021 in addition to trip bonuses till the tip of 2021. The corporate will even lower the quantity it tops up authorities funds to employees working short-time.

Collectively these measures will lower personnel prices by as much as half in 2021, relying on the overall hours labored.

In return, Lufthansa promised to not make compelled layoffs in 2021, whereas providing partial retirement and voluntary redundancy programmes. It’s going to proceed talks on long-term cuts in labour prices from Jan. 1, 2022 when authorities compensation ends.

Verdi mentioned its members nonetheless needed to vote on the deal.

Earlier on Wednesday, the Vereinigung Cockpit union representing Lufthansa pilots provided to contribute 450 million euros to value cuts by extending till June 2022 a deal to trim salaries and pensions that at present ends on the finish of this yr.

The airline has round 5,000 pilots, lots of whom are at present receiving short-time compensation.

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