Lufthansa Pilots' Union Makes New Proposals

German pilots' union Vereinigung Cockpit (VC) have offered concessions in a bid to end a long-running pay dispute at Lufthansa, including agreeing to an increase in the average retirement age and lowering costs.

Lufthansa pilots have staged more than a dozen strikes since April last year to protest plans by management to change retirement benefits and lower costs via expansion of budget carrier Eurowings.

The airline is grappling with an increased pension deficit against the backdrop of low interest rates, and says it needs to cut costs to halt a loss of market share to low-cost carriers in Europe and more nimble competitors such as Turkish Airlines and Emirates on long-haul routes.

VC proposed increasing pilots' average retirement age to 60 from 58, not 61 as Lufthansa had wanted, and conducting a market study to base a pay deal for pilots at Eurowings on that of rival budget carriers easyJet, for short-haul routes, and Condor, for long-haul routes.

It also offered to reduce cockpit crew costs by 20 percent on long-haul Lufthansa routes to certain tourist destinations, where the airline can't rely on demand from business class passengers to keep such routes profitable.

"It's finally time to hold talks and find a solution," union spokesman Markus Wahl said. "I think we're making significant overtures towards Lufthansa management."

The union's offer came after attempts to take the dispute to mediation failed earlier this month, raising the prospect of more strikes. VC said it hoped a deal could be reached by September 1.

Lufthansa welcomed VC's offer and a spokesman said it would suggest a date for talks once it had reviewed the proposals.

The proposals are along the lines of a pact for growth and employment that Lufthansa proposed in February, in which it offered to grow fleet and staff numbers at its main brand in exchange for cost cuts.

However, the union wants Eurowings to be based in Germany, and not Austria, as Lufthansa chief executive Carsten Spohr is planning, so that new pilots can also join German collective agreements.