Lufthansa planes grounded again by second pilots strike in a week

Pilots want early retirement scheme to be maintained

BERLIN (Reuters) — Lufthansa was counting the cost of a second pilots' strike in a week on Friday, which forced the German airline to cancel about 200 flights from Frankfurt airport, Europe's third largest hub.

The airline said the latest strike affected 25,000 passengers and would wipe millions of euros off profits. To cater for stranded guests, the airline has booked 2,200 hotel rooms and has readied 500 camp beds at the airport for transit passengers travelling without European visas.

The strike, which runs from 1500-2100 GMT on Friday and affects short-haul traffic from Frankfurt only, is the third this year organised by labour union Vereinigung Cockpit, which represents around 5,400 pilots at the German airlines.

Lufthansa's pilots are pressing for an early retirement scheme to be maintained for new pilots starting at the airline, Europe's largest in terms of revenue.

Management is under pressure to reduce costs to better compete with low-cost rivals and fast-growing airlines from the Middle East, although it says talks to change the early retirement scheme are not part of its SCORE restructuring plan.

The negotiations with the pilots have become more urgent after Lufthansa cut its profit targets for the next two years in June. It is now aiming for an operating profit in 2014 of 1 billion euros ($1.3 billion), which is to double to 2 billion in 2015.

The airline already saw 60 million euros wiped off its operating profit in the first half of this year by a nationwide three-day pilots' strike in April.

Last week's six-hour strike at budget unit Germanwings is expected to cost over 10 million euros and analyst Juergen Pieper estimated a cost of around 5 million for Friday's strike.

However, Lufthansa's chief executive Carsten Spohr has told managers at the airline that the company has to stand its ground. Otherwise it will not be able to afford its pilots, which he described as some of the best, in the future.

The early retirement scheme was developed 50 years ago when pilots were forced to stop flying at the age of 55. That left a gap of around eight years before regular pension payments in Germany kicked in.

To bridge the gap, Lufthansa came up with a scheme that allowed the pilots to receive up to 60 percent of their pay in the interim period.

However, pilots in Europe may now work until the age of 65, following a recent European court ruling.

Lufthansa therefore wants to change the scheme, increasing the early retirement age to 60 for those starting after 2014. It says the average age at which its pilots retire is 59, which it wants to increase to 61.

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