November 4, 2012 / 3:42 PM / 8 years ago

Lufthansa arbitration talks to end mid-November: source

FRANKFURT (Reuters) - Tense mediation talks between Lufthansa (LHAG.DE) and cabin crew over pay and conditions should reach a conclusion in mid-November, although it is not clear whether they will be successful, a source close to the negotiations said on Sunday.

An aircraft of German air carrier Lufthansa stands in front of the newly built A-Plus terminal section at the Fraport airport during a guided media tour in Frankfurt September 28, 2012. A-Plus will officially open on October 2. REUTERS/Lisi Niesner

“We believe there will be something to announce on November 13. Whether an agreement or a failure,” said the person, who declined to be identified as the talks are confidential.

The differences between the two sides are glaring, the person said, adding that the negotiations were tough.

German magazine Focus earlier reported that the mediation talks had come close to failing several times already.

A spokesman for Lufthansa declined to comment, citing the confidentiality agreement.

Should the talks fail, it could mean strikes at Germany’s largest airline in the run-up to Christmas, the magazine said.

The two sides had negotiated for 13 months when initial talks broke down over the summer.

The resulting walkouts by cabin crew forced Lufthansa to cancel over 1,000 flights, causing it tens of millions of euros in losses.

Lufthansa is currently in the middle of a program to lower costs to improve profit by 1.5 billion euros by 2015 and wants cabin crew to contribute.

Among measures, Lufthansa plans to expand its low-cost Germanwings service, leading cabin crew to fear they will be put on to lower-pay contracts.

Presenting its third-quarter results last week, the airline warned more cost cuts would be needed to counter high fuel prices and a sluggish European market.

In an interview broadcast on German television channel Phoenix on Sunday, Chief Executive Christoph Franz said: “We can’t rule out compulsory redundancies, but we want to act in as responsible a way as possible and I’m confident we will manage it.”

The UFO union representing cabin crew entered the mediation talks asking for a 5 percent pay rise over 15 months, while Lufthansa had offered 3.5 percent over three years.

UFO declined to comment Sunday.

Reporting by Peter Maushagen and Victoria Bryan; Editing by Martin Zwiebelberg and Jason Neely

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