Published on : Saturday, November 26, 2016
Bettina Volkens, Chief Officer Corporate Human Resources and Legal Affairs of Deutsche Lufthansa AG, is reaching out to the union VC: “Our major differences in the failed negotiations for the collective wage agreement appear to be the result of differing views regarding the future development of Lufthansa Group. Although, formally, the labour dispute is only about compensation, we know from discussions with our pilots that many other unresolved collective bargaining issues are also important to them. Which is why I would like to renew our offer of a comprehensive solution. This offer includes a bundle of concrete suggestions for solutions to all pending collective bargaining agreements. Among other things, in the context of this comprehensive solution, we are also able to offer the pilots the higher salary increase they are currently demanding. This would be made possible by savings in other areas – for instance by modernizing the pension system,” says Volkens.
In spite of rapidly evolving parameters, the offer is being renewed, above all for the benefit of our customers and all other groups of employees. It addresses the following points in particular:
Career prospects and opportunities for pilots
Lufthansa has made an offer to Vereinigung Cockpit to crew approximately 330 passenger aircraft, including 100 long-haul aircraft, in stages by 2021 – with compensation conditions based on present-day compensation levels – in the companies covered by the group-wide collective labour agreement (KTV). With this model based on career opportunities, the group would, over the next five years, hire up to 1,000 trainee pilots and create up to 600 positions for prospective captains. “We are responding to VC’s interest in offering pilots in Germany employment and career prospects and, at the same time, highly attractive conditions,” Volkens emphasizes.
Compensation agreement and framework agreement
The fundamental requirement for these career prospects and opportunities is a modernization of the collective labour agreements. The aforementioned opportunities can only be created if they are reasonably competitive and take the conditions of today’s market into account. The entry-level compensation and possible maximum compensation in Lufthansa’s offer remain based on present levels. At the same time, a more moderate growth model should make cost relief possible in the long term.
The offer provides additional support for the necessary structural cost reductions in the overall system through an alignment of the provisions in the framework agreement. Among other things, a higher trigger for excess flight hours or a more flexible arrangement regarding non-working days should contribute to an increase in productivity.
At the same time, the cockpit employees of Lufthansa, Lufthansa Cargo and Germanwings are being offered a one-time payment of 1.8 monthly salaries, in view of the collective compensation agreements which have been pending since 2012. The offer also includes an increase in compensation of 4.4 percent in two stages. A 2.4 percent increase would occur in 2016, with an additional 2.0 percent increase in 2017. The new collective compensation agreements would apply from May 2012 to mid-2018, translating into a duration of over six years.
The offer provides for the current system of transitional payments to remain in place in essence, and would also apply to newly hired cockpit crew. The only adaptation would be an increase in the target average retirement age for Lufthansa Passage pilots to 60 years in stages by 2018. The most recent actual retirement age was above 59 years. The retirement age of 60 already applies to Lufthansa Cargo and Germanwings. The existing coverage in case of permanent flight disability would remain in place.
The pension system would be converted from a system of guaranteed future payments (defined benefit) to a system of guaranteed premiums (defined contribution) in the same manner that has already been agreed upon for ground staff and cabin crew. The conversion would result in a substantial one-time relief in pension obligations and a sustainable reduction in annual costs for pensions and transitional payments. “This would be an important step towards improving the future viability of Lufthansa Group,” says Volkens.
Cockpit employees will continue to be offered an attractive pension scheme, in which voluntary additional contributions can be made by employees who wish to obtain the current level of pension payments. The pension scheme would provide for a contribution of 5.2 percent of eligible salaries across the board.
Rotation opportunities for pilots
Regarding rotation opportunities for pilots, the offer stipulates that, in general, open positions will be filled from within the respective companies. A rotation between companies should be possible at least once over the course of a career.
“We had already approached Vereinigung Cockpit with this model in September and would like to take this step towards the union again. I would like to combine it with an offer of comprehensive mediation regarding all pending collective bargaining agreements. As VC has unfortunately categorically ruled out arbitration so far, I would like to take this opportunity together with VC to overcome the existing divides,” says Bettina Volkens.
Lufthansa is prepared to negotiate the particulars of this offer at any time – and of course that also includes this weekend. A meeting between Lufthansa and VC has already been suggested for Tuesday, 29 November 2016. This meeting could be used as a starting point for new talks.
Apart from this, Lufthansa’s offer of arbitration for the collective wage agreement still stands.