Ad hoc announcement according to Section 17 MAR

10:20 a.m. – Deutsche Lufthansa AG and pilots’ union Vereinigung Cockpit agree on non-binding terms regarding all relevant open tariff agreements

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Arbeitgeberverband Luftverkehr (AGVL), Deutsche Lufthansa AG, Lufthansa Cargo AG and Germanwings GmbH have agreed on non-binding terms with the Vereinigung Cockpit pilots’ union (VC) regarding a comprehensive solution of all open tariff issues. It is intended to also replace the terms that were agreed in the mediation on the wage tariff agreement in February 2017. The Executive Board of Deutsche Lufthansa AG considers the conversion of these terms into legally binding agreements as likely. Items covered by the terms for Lufthansa German Airlines, Lufthansa Cargo and Germanwings are in particular:

• The conclusion of long-term collective bargaining agreements with VC regarding wages, productivity, transitional payments and pensions for a period until at least June 2022.
• The shift from a defined benefit to a defined contribution pension system for future pension claims and the gradual increase of the retirement age for transitional benefits to an average of 60 years.
• The changes in the agreements on transitional payments and pensions probably would have an expected one-time relief on pension liabilities of a high three-digit million euro amount in the financial year 2017 and a positive effect on the Company’s EBIT.
• Productivity increases for current and new employees as well as the implementation of a new pay-scale.
• Agreed-upon and timely staggered wage increases of 11.4% in total and a one-time payment amounting to 1.8 monthly salaries for the period from May 2012 until June 2022.

The collective bargaining partners have agreed on a common approach for the economic success of the Lufthansa Group from which employees, shareholders and other stakeholders are to benefit. By means of the aforementioned measures they hence aim at a significant decrease of the average cockpit unit costs of Lufthansa German Airlines, Lufthansa Cargo and Germanwings.

Other key points of the non-binding terms concerning structural topics include in particular:

• The staffing of at least 325 aircraft of the mentioned airlines with cockpit personnel of the so-called „Konzerntarifvertrag“ at the above mentioned conditions until the end of the term of the agreements.
• In this context, the creation of at least 600 positions for captain candidates in the „Konzerntarifvertrag“ until the end of 2022 and perspectively the employment of more than 700 new pilots. 

Further details of the various collective bargaining agreements are to be agreed during the course of this year. The parties jointly strive for a long-term collective labour peace. This agreement is subject to board approval and subject to a ballot in the VC. 

Note: The mentioned values might be subject to changes as they are amongst others dependent on the reference interest rate used for the calculation of pension liabilities.

Person making the notification: Andreas Hagenbring, Head of Investor Relations Lufthansa Group.

Deutsche Lufthansa AG
Media Relations Southern Germany