Lufthansa makes new offer to pilots in pay row

FRANKFURT (Reuters) - Lufthansa (LHAG.DE) has made a new pay and retirement offer to pilots on in-house contracts, a spokesman said on Friday, as the company seeks to resolve a dispute that stretches back four years.

The German airline, which wants to bring down costs to better compete with leaner rivals, has been hit by a wave of strikes over the past two years as a result of ongoing pay disputes with pilots and other staff.

However, a person familiar with the situation warned that further strikes could be on the cards if Lufthansa doesn't improve the latest offer.

The source said that many pilots viewed the offer as insufficient because it would equate to a 7 percent drop in pay when adjusted for inflation.

Lufthansa said the new offer to pilots includes a one-off payment for the period from May 2012 to the end of 2015 that is equivalent to one month's salary -- about 12,000 euros ($13,540) on average. Pilots would then receive a pay rise of 1.2 percent from July 2016 and 1.3 percent from January 2018.

The company also repeated an offer to keep an early retirement scheme for existing staff.

Strikes by staff, including cabin crew as well as pilots, cost Lufthansa 231 million euros in lost earnings last year, though that did not stop it from reporting record profit for the year, helped by low oil prices.

German magazine Spiegel reported that the next meeting between the two sides would be on April 22.

($1 = 0.8863 euros)

(Reporting by Peter Maushagen; Writing by Victoria Bryan; Editing by David Goodman)