The trade union Verdi and the Lufthansa subsidiary Discover Airlines have agreed on a collective wage agreement for the first time.

Negotiations with the other two unions, Vereinigung Cockpit (VC) and the flight attendants' union UFO, had previously failed. The pay increases for around 500 cockpit employees at the beginning of the year will be secured by collective agreement, as Verdi announced on Friday. The salaries of the 1,400 cabin crew will increase by 450 euros per month. According to the airline, the adjustments will apply from July 2024. In addition, both professional groups will receive an annual increase of five percent from 2025. According to Verdi, this will increase the salaries of pilots by at least 15.7 percent overall, and between 34.1 and 38.4 percent for cabin crew.

"We have now achieved the long-awaited pay settlement at Discover Airlines, which had stalled in the meantime," said Verdi negotiator Marvin Reschinsky. The result is significantly higher than the demands of the other unions. Discover CEO Bernd Bauer said that the first collective bargaining agreement was an important milestone in the history of the young airline, which began flight operations in summer 2021. "We must not ignore the fact that the agreement is also accompanied by significant cost burdens and restrictions on our planning flexibility. We have reached the limits of our economic capacity here." The remuneration and collective wage agreements run until the end of 2027.

Exclusive special benefits for Verdi members are a novelty. They receive half a month's salary per year as a bonus, which could be exchanged for longer notice periods in the event of an economic crisis. Verdi achieved this in return for an agreement to go to arbitration before a strike in the event of a dispute.

VC AND UFO COULD STRIKE

It is questionable whether this will bring calm to the Lufthansa subsidiary, which was hit by strikes at the beginning of the year. Labor disputes at Lufthansa and Discover in the spring cost half a billion euros in earnings, and Lufthansa had to lower its annual targets. The wage agreement is causing anger at VC and UFO. VC protested shortly before the conclusion of talks with Verdi and announced a strike in the summer if Discover did not also conclude the almost finalized collective agreements with them. "The fact that collective bargaining is now to take place with a union that has no support among the workforce may seem easier for the employer at first glance, but it will not lead to a sustainable solution," explained VC CEO Andreas Pinheiro.

UFO declared this week that the looming agreement with Verdi was a scandal, because together with VC they have around 1,000 members, i.e. almost half of the workforce. According to UFO, Verdi's representation is much weaker, which is why the flight attendants' union demanded an immediate membership count. According to the Collective Bargaining Unity Act, however, this is only possible if the rival unions also conclude a collective agreement. The agreement of the union with the most members would then apply. Should the airline management refuse to conclude collective agreements with VC and UFO, forced strikes would be imminent.

(Report by Philipp Krach and Ilona Wissenbach, edited by Myria Mildenberger. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).