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Talks to resolve Lufthansa pay dispute stalled, union says

A Lufthansa emblem is pictured at the company headquarters ahead of a news conference in Frankfurt, March 12, 2015. REUTERS/Ralph Orlowski

FRANKFURT (Reuters) - Talks to resolve a pay dispute at German airline Lufthansa (LHAG.DE) have stalled and a resolution is still not in sight, German flight attendants' union UFO said on Monday.

Union chief Nicoley Baublies said he had received a message from Lufthansa's chief executive Carsten Spohr late on Monday, urging him to get back in touch.

"I am not very hopeful," Baublies said, adding that contact with Spohr was not equivalent to resuming full negotiations between the airline and the union.

Lufthansa faces a June 30 deadline to make concessions to cabin crew over pay and pensions or face strikes over the busy summer holiday season.

Lufthansa has been in lengthy talks with various staff groups to try to cut costs to compete more effectively with low-cost airlines and Gulf airline rivals.

UFO said earlier on Monday its members were ready to talk and Lufthansa CEO Spohr told journalists he was optimistic that a deal could be reached.

UFO said last week its members would strike on July 1 if Lufthansa did not put forward a much better offer on pay and pensions.

More one-day strikes would follow that could last until Sept. 16, disrupting travel over the lucrative peak summer season, the union said at the time.

Spohr said the airline needed 24 hours' notice to change flight plans so it was crucial to come to an agreement on the negotiation process with unions by the morning of June 30 at the latest.

The dispute centers around the airline's pension scheme.

Lufthansa has said that low interest rates mean it can no longer afford the retirement scheme it offers to cabin crew.

The costs of the scheme, which amounted to some 3.7 billion euros ($4.1 billion) last year, are of particular concern for the airline because cabin crew can take early retirement from the age of 55 due to the strains of frequent flying.

It wants employees to contribute more of their salary towards their pension. UFO wants to keep much of the current retirement scheme.

Spohr said the airline wanted to ensure that employees who had been with the company the longest would be least affected by the pension changes.

Lufthansa shares were down nearly two percent, while the German blue chip index (.GDAXI), hit by the Greek debt crisis, was down 3.56 percent.



(Reporting by Peter Maushagen and Victoria Bryan; Writing by Harro ten Wolde; Editing by Jeremy Gaunt and Jane Merriman)