Due to disagreement over retirement benefits, Lufthansa and cabin crew union Unabhängige Flugbegleiter Organisation (UFO) decided to undergo mediation. Several strikes from the pilots last year disrupted travel and threatened the German economy, making resolution an urgent need.

On 20th October last year, German airline Lufthansa cancelled 1,450 short- and medium-haul flights, hindering the travel plans of more than 200,000 passengers. The pilot wing of the airline and trade union UFO had staged a 35-hour strike, keeping planes grounded.

The reason for the work stoppage?

A disagreement between the pilots and the management over an early retirement scheme. Under this, pilots can take early retirement at age 55, and continue receiving a portion of their salary until they turn 65, when they are eligible for pension payments. To cut costs, Lufthansa wanted to reduce the coverage of the plan to employees who became part of the company before 2014. It also wanted to change the early retirement age for new recruits from 55 to 60 years old. The union, however, wanted to retain the current retirement scheme. In the past year, the group staged 10 strikes as protest against the airline’s plan.

As a result, Lufthansa lost about USD 232 million from its operating profit. Aside from this, the strikes could potentially jeopardise the country’s entire economy, the German Industry Federation business lobby warned. With the strikes’ far-reaching impact, it was crucial for the airline and the union to seek urgent avenues for resolution.

Fortunately, both of them agreed to undergo mediation. The talks are expected to take place this month, after UFO conducts a ballot of its members for industrial action. Lufthansa, on the other hand, expressed optimism on what mediation can do. “I am confident that amicable and sustainable solutions can be worked out with the support of a mediator,” said Bettina Volkens, a member of the Lufthansa board.

Can mediation resolve the dispute between Lufthansa and UFO? Well, mediation allows both sides to express their perspectives and taken the time to understand the other’s situation. For instance, UFO may state its case as to why it wants to retain the early retirement scheme. On the other hand, Lufthansa may reason out that it wants to level the playing field with other low-cost carriers by scrapping the retirement plan. As a result, both sides will be listened to and will learn more about each other’s point of view.

Apart from this, mediation, rather than litigation, may yield a more satisfying outcome for both sides. Though Lufthansa’s move on the early retirement scheme is disagreeable for UFO, a creative and certain outcome can be achieved in mediation. In court, rarely neither party receives the ruling or orders that it expects or hopes for. In mediation, both of them have a say on the final outcome, make the final decisions thereby giving them certainty of outcome.

Mediation may also allow Lufthansa and UFO to reach a resolution faster. Through the mediator, the pace of the discussion can be maintained in a timely way. This means that the UFO and Lufthansa don’t have to wait for lawyers, court processes like discovery, court hearing or trial dates or a judge or tribunal members to deliberate and then deliver judgment. The mediated agreement can become formalised by the lawyers as soon as the agreement is reached.

As of the moment, there is no further news about the status of talks between Lufthansa and UFO. Through mediation, however, the long-standing conflict between them is likely come to an end faster than it would through court. Furthermore, both Lufthansa and UFO may be able to avoid all the bad publicity that comes with litigation, while resolving its dispute efficiently and preserving future working relations. Surely, that should be reason enough for both UFO and Lufthansa to reach a mutually satisfying outcome at mediation?