Lufthansa flights return to normal but pilot row not resolved

FRANKFURT - Lufthansa flights returned to normal on Thursday after a court brought an early end to a two-day pilots' strike but union leaders said they were weighing their options, indicating more disruption could be on the cards.

In an unexpected decision, a court in Frankfurt ruled on Wednesday that the pilots' union did not have the mandate to include the airline's low-cost expansion plans in talks over pay and retirement benefits and therefore the strike was unlawful.

The strike, which began on Tuesday, led to over 1,000 flight cancellations, affecting 160,000 customers.

While the court decision may have strengthened management's position, the two sides are still no closer to reaching agreement in a bitter dispute that has seen 13 strikes in 18 months.

The carrier's shares, however, were up 1 percent after the decision on Thursday, among the top gainers on the German stock market.

The pilots' union, Vereinigung Cockpit (VC), said it would have to carefully review the court's full decision - which only halted Wednesday's strike and not future ones - before deciding on its next steps. "Everything is possible," VC spokesman Markus Wahl told Reuters. "A strike is an option, just as talks with Lufthansa are an option." A spokesman for Lufthansa, Germany's biggest airline, said it was ready to restart talks over pay and retirement benefits at any time. It has not suggested any dates for talks though.

The row initially started out over early retirement benefits, but has lately encompassed Lufthansa's plan to expand low-cost operations via its Austrian-registered Eurowings unit.

The judge took more recent comments made by the union to media and management into account when deciding whether the latest strike was justified, rather than basing the decision on the formal reason given by the union when it originally voted to strike.

Industry watchers have applauded Lufthansa for standing its ground and pressing ahead with low-cost expansion despite the strikes.

The airline needs to lower costs to compete with budget rivals such as Ireland's Ryanair, which are expanding fast. CAPA-Centre for Aviation estimates Ryanair's costs are 60 percent below that of Lufthansa's main brand.

While strikes normally receive public backing in Germany, the pilot strikes have met with criticism in the media, which accuse the pilots of trying to hang on to outdated privileges to the detriment of the company and other employees that have already agreed cost cuts. "Fortunately for passengers and the other 115,000 employees, who don't enjoy the same benefits as the ladies and gentlemen of the skies, the judge sent the pilots back to the cockpit,"German conservative daily Frankfurter Allgemeine Zeitung said in an editorial.