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Lufthansa makes new wage offer to striking pilots

BERLIN (Reuters) - Lufthansa LHAG.DE said it had made its German pilots a new wage offer to try to end strikes that are causing hundreds of flight cancellations and costing millions of euros a day.

The airline said on Wednesday it had dropped demands that would see pilots working more hours in exchange for a wage increase. It is still offering to raise pilots’ pay by 4.4 percent in two installments in 2016 and 2017 and make a one-off payment worth 1.8 months’ pay.

Union Vereinigung Cockpit has called for an average annual pay rise of 3.7 percent for 5,400 pilots over a five-year period backdated to 2012 and had criticized management for seeking additional concessions in exchange for more money.

“We want to get back to the negotiating table as quickly as possible,” Lufthansa board member Bettina Volkens said in a statement, adding she hoped the two sides could then discuss other issues such as pensions.

A VC spokesman said the union could not immediately comment on the fresh proposal.

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German businesses and some other Lufthansa staff have called for an end to the protests, which are costing the airline 10 to 15 million euros a day.

The strike by pilots on Wednesday grounded almost 900 Lufthansa flights and is the sixth day of strikes since last week. Lufthansa has canceled about 4,500 flights since the walkouts started last week, the latest in a series of protests that date back to early 2014.

Lufthansa says it has to cut costs to compete with leaner rivals such as Ryanair on short-haul routes and Emirates [EMIRA.UL] on longer flights.

One of Lufthansa's major corporate customers, Siemens SIEGn.DE, said the strikes were harming the Germany economy and the country's image and warned Lufthansa that it needed to become more reliable.

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“As a major customer we have to consider how we can deal with this on a long-term basis,” Siemens CEO Joe Kaeser told German daily Bild, adding that the pilots should resume talks.

Analysts have said the walkouts are a good opportunity for rivals such as Ryanair RYA.I and easyJet EZJ.L to gain market share and could mean Lufthansa misses its 2016 profit target. Its shares dropped 2.5 percent on Wednesday, also hit by a rising oil price.

The pilots’ union Vereinigung Cockpit (VC) held a rally at Frankfurt airport on Wednesday morning, but also faced a counter-demonstration from Lufthansa ground crew, who feel the pilots are hurting the company and jeopardizing jobs.

Reporting by Victoria Bryan; Additional reporting by Peter Maushagen; editing by David Clarke and Keith Weir