Lufthansa resolves wage dispute

Lufthansa hopes to resume a full schedule "quickly"

German airline, Lufthansa, has reached an agreement to end a five-day strike over pay, but warns flights will continue to be disrupted.

The union representing ground staff accepted a 5.1% pay rise this year and a 2.3% increase from July 2009.

However, 130 flights were cancelled on Saturday and Sunday as the airline attempted to clear a backlog of maintenance work.

Lufthansa hopes to reduce the number of cancellations to 40 by Tuesday.

The strike had involved about 5,000 members of the Verdi trade union who had demanded a 9.8% pay rise. They began an indefinite strike last Monday.

Lufthansa said the pay settlement, which ends in February 2010, represented " a compromise at the bearable limit".

The deal also includes a one-off performance-related bonus of up to 2.4% of annual pay.

"It is imperative that the increased costs be compensated by higher productivity," the airline said.

Like other airlines around the world, Lufthansa is facing both the rising cost of airline fuel and a slowdown in spending on travel.

Its net profits of 402m euros (�317m: $625m) were almost 60% lower in the first six months of the year, compared to the same period in 2007.

The union had estimated that the strike would cost Lufthansa 5m euros a day.