A breakthrough has been reached in negotiations to prevent further strike action by pilots which cost Lufthansa €100 million last year.

The airline group and German pilot’s union Vereinigung Cockpit (VC) came to an agreement covering all previously unresolved collective bargaining matters.

As a result, the airline is dropping a previously announced plan to staff 40 newly acquired aircraft outside a group-wide collective bargaining agreement.

The new agreement over pay, pensions, work conditions and a collective wage deal has made a formal acceptance of the arbitration recommendations unnecessary.

A reciprocal agreement to refrain from industrial action for the duration of the talks has already been reached, and is set to be formalised in a collective bargaining agreement that will last until 2022, according to the airline.

Details of the various collective bargaining agreements still has to be worked out over the next months.

And Lufthansa faces a one-off balance-sheet reduction through the conversion of the pension schemes.

In return for the cost-reducing elements of the agreement, 325 aircraft will be crewed in the current collective bargaining pact flight operations in stages by 2022.

This will make it possible for Lufthansa to hire trainee pilots again in the coming years and create career prospects for pilots with a large number of positions for prospective captains.

Lufthansa head of legal affairs and human resources, Bettina Volkens, said: “With this declaration of intent we have finally reached a breakthrough.

“The path is now clear for a comprehensive settlement with Vereinigung Cockpit on all unresolved collective bargaining issues.

“This is not only the end of the longest collective bargaining dispute in our company’s history – it also creates a sustainable deal that will last until 2022 and, at the same time, lays the foundation for a new social partnership with the Vereinigung Cockpit.

“The path to this result exacted a heavy toll from everyone involved – but, in the interest of Lufthansa, our employees, customers and shareholders, it was worth it.

“We have a lot of work ahead of us now, because we want to implement this settlement in collective bargaining agreements together with the union as quickly as possible.”