Strikes averted as Lufthansa, cabin crew progress on pay, pensions

BERLIN (Reuters) - Lufthansa (LHAG.DE) and its main cabin crew union have agreed preliminary deals on pay and pensions and have come up with a mediation scheme for other areas of dispute that will see cabin crew strikes ruled out until the end of June, they said on Friday.

Lufthansa and the cabin crew union UFO have been at loggerheads over a range of issues from pay, pensions, conditions and early retirement benefits, culminating in November when the union staged the longest ever strike in the German carrier's history.

Lufthansa is trying to cut costs as it battles to compete with low-cost rivals in Europe on short-haul routes and fast-growing Gulf carriers on long-haul flights, but has met opposition from unions, much like Air France-KLM (AIRF.PA).

The pay deal runs until September 2016 and sees around 19,000 cabin crew receiving a one-off payment of 3,000 euros ($3,250) for 2015, plus a pay rise of 2.2 percent from Jan. 1, 2016.

A few details on pensions still remain to be negotiated, which Lufthansa and UFO will try to agree on by Feb. 15. Failing to do so, they will be discussed in mediation, along with a new pay deal for the period from Oct. 1, 2016, Lufthansa said.

Lufthansa said it was separately holding talks with the union on conditions at low-cost unit Eurowings and on moving staff to other airlines in Germany within the Lufthansa group.

Lufthansa shares extended gains on the news and were up 2.4 percent at 0952 GMT, outperforming the wider blue-chip index, up 1.8 percent (.GDAXI).

($1 = 0.9230 euros)

(Reporting by Victoria Bryan; Editing by Jonathan Gould and Maria Sheahan)