* Union says Germanwings pilots to strike on Friday
* Dispute over retirement scheme
* Strike set to run for six hours from 0400 GMT
* 116 flights cancelled on Friday
* Lufthansa shares down 3 percent
(Recasts with union response, adds Germanwings customer
By Victoria Bryan and Peter Maushagen
FRANKFURT/BERLIN, Aug 28 A row at German airline
Lufthansa over an early retirement scheme for its
pilots shows no sign of being resolved any time soon after talks
broke down and a strike was announced for Friday at its low-cost
The Lufthansa pilots want the management to maintain a
scheme that allows them to retire early at 55 and still keep
some of their pay until they reach the age at which state
pension payments start.
The Vereinigung Cockpit (VC) union that represents about
5,400 Lufthansa pilots said that pilots at its Germanwings
operation would strike for six hours from 0400 GMT on Friday
unless a deal was reached during talks on Thursday.
However, Lufthansa ended the talks on Thursday and said it
had wanted to use the meeting to agree a timetable for further
negotiations, rather than to reach a final deal.
"It is not realistic to expect to reach a deal on a new
model for pension provisions in one day," Lufthansa's head of
personnel, Bettina Volkens, said in a statement.
The dispute is set against the backdrop of a Lufthansa
overhaul to boost competitiveness against no-frills rivals and
Gulf carriers, seeking to lift group operating profit to 2.3
billion euros by 2015, up by 1.5 billion euros on 2011, though
it says negotiations on the early retirement scheme do not form
part of its SCORE cost-cutting programme.
In response to the failure of Thursday's talks, VC said it
was preparing for a lengthy battle but that Lufthansa could
avoid further strikes by meeting the pilots' demands.
Lufthansa shares extended losses after the announcement that
talks had been broken off and were down 2.8 percent at 1430 GMT.
Germanwings cancelled 116 flights planned for Friday
morning, equivalent to 70 percent of its flights during the
six-hour period. About 15,000 passengers, many of whom are
travelling at the end of the summer holiday period, will be
About 700 of the Lufthansa group's more than 9,000 pilots
work at Germanwings, which has been taking over Lufthansa's
European routes outside of Frankfurt and Munich as the company
seeks to stem losses on short-haul routes.
Pilots at Lufthansa held a three-day nationwide strike in
April, grounding almost all the company's flights and wiping 60
million euros ($79 million) from its first-half profit.
However, the three-day action was widely condemned across
Germany as people criticised the demands of what many regard as
a highly paid group of workers. The pilots' union had said this
week that any subsequent strike action was likely to be smaller
and for only a few hours at a time.
The latest cancellations prompted an angry reaction from
Germanwings customers on Facebook, with one describing the union
as "insatiable fantasists" and another asking when it would be
possible to sack pilots.
Germanwings, which operates with a fleet of 52 aircraft, has
164 flights scheduled for Friday's strike period.
Bankhaus Metzler analyst Juergen Pieper said the six-hour
walkout could result in a 2-3 million euro hit to operating
profit and that this strike, at least on its own, would not
endanger the company's goal of about 1 billion euros of profit
Travellers in Germany also face a possible walkout by
employees at rail operator Deutsche Bahn. However, VC
and the train drivers union GDL said they would coordinate to
avoid a total shutdown of domestic transportation routes. The
GDL said on Thursday that it would not go on strike this week.
Germanwings said passengers on domestic German flights would
be rebooked on train services where possible.
The early retirement scheme was introduced more than 50
years ago because pilots could not work beyond the age of 55 and
were left with a gap of up to eight years before they could draw
a pension. The scheme provided for them to receive 60 percent of
their wages during the interim years.
Lufthansa wants to scrap the scheme and increase the early
retirement age to 61 now that a European court has ruled that
pilots can work until the age of 65. The airline initially
cancelled the scheme with effect from the start of 2014 but now
says it will remain in place until 2016 to allow time for
($1 = 0.7567 euro)
(Additional reporting by Maria Sheahan and Hans Seidenstuecker;
Editing by Pravin Char and David Goodman)