Lufthansa employees wait for customers beside Christmas decoration at the airport in Munich, southern Germany, Tuesday, Dec. 2, 2014. German airline Lufthansa said it has cancelled about half of its flights after pilots went on strike in an ongoing dispute over retirement benefits. (AP Photo/Matthias Schrader)
Passengers stand behind a flight board listing canceled flights at the airport in Munich, southern Germany, Tuesday, Dec. 2, 2014. German airline Lufthansa says it has canceled about half of its flights after pilots went on strike in an ongoing dispute over retirement benefits. The airline, Germany's largest, said Monday that 1,350 of its 2,800 flights scheduled through the strike's end Tuesday at midnight have been canceled, affecting 150,000 passengers. The strike was primarily focused on Lufthansa's inner-Europe flights on Monday but was to be extended to long-haul flights Tuesday. (AP Photo/Matthias Schrader)
BERLIN — German airline Lufthansa on Wednesday announced plans to launch budget long-haul services at the end of next year in collaboration with SunExpress, a joint venture with Turkish Airlines.
Lufthansa's supervisory board gave the go-ahead to expand the company's low-cost operations amid a battle with a union representing pilots at the airline.
The union, Vereinigung Cockpit, said it would hit Lufthansa's long-haul flights on Thursday with its second strike this week in a dispute over the airline's plans to cut transition payments for pilots wanting to retire early, which the union wants to see maintained. Lufthansa offered to take the issue to arbitration.
Lufthansa is citing increasingly tough competition as it sets out its future plans. Traditional national carriers such as Germany's biggest airline are being squeezed both by European budget carriers and major Gulf airlines, and Lufthansa already has lower-cost offshoots in Germanwings and Eurowings.
The company said its budget operation's first long-haul destinations will include locations in Florida, southern Africa and the Indian Ocean. The flights — to be flown by SunExpress crews — will initially be operated by three Airbus A330-200 aircraft, and the budget long-haul fleet will be expanded to as many as seven leased A330-200s "over the next few years."
Its home base will initially be the Cologne-Bonn airport, Lufthansa said. The airline's two traditional hubs are Frankfurt and Munich.
"For several years now we've been facing fierce competition from the rapidly-growing low-cost carriers in the point-to-point travel segment, not only in Germany but throughout Europe, too," CEO Carsten Spohr said. "And we are sure to see this competition extend more and more to the long-haul travel segment in the years ahead."