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Deutsche Lufthansa AG, Europe’s second-biggest airline, reached a wage agreement with 14,000 flight attendants that will save 40 million euros ($51 million) through 2006. The contract is the final labor accord under the carrier’s savings plan.
The flight attendants agreed to give up two vacation days and work two extra hours a month when needed in exchange for job security and a salary increase of at least 2.5% starting January 1, 2007, Mirco Vorwerk, the cabin crew union’s chairman, said in a telephone interview on Monday.
Pay raises through 2006 will depend on the Cologne, Germany-based airline’s earnings performance, the union and airline said in separate statements. Lufthansa agreed to create 1,000 new jobs in Germany over the next two years.
Lufthansa and 37,000 ground workers agreed in December to save more than 150 million euros ($193 million) by next year with a wage freeze through December 2006 and less vacation.
The airline’s 4,400 pilots agreed to cap salaries through March 2006 and accept extra working hours and lower starting pay. The cuts are part of a 1.2 billion euro savings plan through 2006, which includes a target of reducing labor costs by 300 million euros.
“We haven’t yet reached the 300 million euro goal,” Christine Ritz, a Lufthansa spokeswoman, said in a telephone interview.
The revised figure will be released May 11 when the company posts first-quarter earnings, she said. Today’s agreement will bring annual savings of 30 million euros starting in 2007.
Shares of Lufthansa rose 7 cents, or 0.7%, to 10.30 euros as of 1:31 p.m. in Frankfurt. The stock has fallen 2.4% this year, valuing the carrier at 4.72 billion euros.
Chief executive Wolfgang Mayrhuber’s savings program, started in 2003 after a record loss of 984 million euros, was 52 million euros short last year because labor negotiations took longer than the company expected.
Lufthansa also is in talks with Fraport AG, which operates the airline’s main hub at Frankfurt Airport, about lower service fees.
The carrier, which posted net income of 404 million euros for 2004, said on March 23 that the cost of bringing Swiss International Air Lines Ltd into its network this year will hold back annual profit. |
