Lufthansa, pilots agree to mediated talks on pay dispute

Lufthansa and German pilots' union Vereinigung Cockpit have agreed to mediated talks to resolve a row over contracts dating back to 2012, the two parties said on Friday.

Lufthansa has been embroiled in a series of separate disputes with its pilots and cabin crew staff over pay and conditions as management seeks to reduce costs to compete with budget airlines and more efficient long-haul carriers.

Mediation is to be completed by the end of January, during which time the pilots will not call for further strikes, Lufthansa and VC said in a statement on Friday.

"The negotiating table is the only place where we can find solutions that offer prospects for employees and for the company," Lufthansa executive Bettina Volkens said.

Lufthansa's pilots have walked out 15 times since early 2014, costing the carrier hundreds of millions of euros in lost profits. Most recently, they were on strike for six days in November, costing the airline a further 100 million euros ($104 million) in profits.

Seeking to halt the strikes, Lufthansa dropped demands for concessions in exchange for higher pay. It has proposed an increase of 4.4 percent in two instalments in 2016 and 2017, plus a one-off payment worth 1.8 months' pay.

The pilots have asked for an average annual 3.7 percent increase over a five-year period back-dated to 2012, which is when their last collective bargaining contract with Lufthansa expired. The pilots say altogether these increases would amount to a rise of nearly 20 percent on current pay.

CABIN CREW DISPUTE

Separately, cabin crew union UFO said on Friday that three-way talks with Lufthansa's budget carrier Eurowings and fellow union Verdi had failed to reach an agreement.

UFO has been trying to agree new contracts for staff at Eurowings for two years. The carrier reached a separate agreement with Verdi earlier this month, but UFO said on Friday it had sought a deal that both unions could live with.

($1 = 0.9584 euros)

(Reporting by Maria Sheahan; Editing by Greg Mahlich)