BUSINESS
10/12/2011 11:36 EDT | Updated 12/12/2011 05:12 EST

Germany air controllers reach deal for new contract, strike averted

FRANKFURT - Germany's air traffic controllers union said Wednesday that it had reached a new labour agreement with management, averting a disruptive strike.

Spokesman Matthias Maas confirmed a deal had been struck by negotiators after several hours of talks at a hotel near Frankfurt's airport.

He said the deal still needed approval by the union's wage commission, which is to meet Friday.

The DFS aviation agency said the two sides agreed with the help of a mediator on a 17-month deal that involves a pay increase of 5.2 per cent in two steps.

The GdF union had rejected a management offer on Monday, raising the possibility of a strike this week. It would have been an especially inconvenient time for the thousands of people attending the Frankfurt Book Fair from Wednesday through Sunday and also fallen during several states' fall school break.

The state-owned DFS air traffic control agency has about 6,000 employees, co-ordinating about 10,000 flights a day — making Germany's skies the busiest in Europe.

The DFS sent the dispute over pay and working conditions to arbitration in early August, but the union partly rejected the outcome a month later. Both sides accepted the arbiter's compromise salary figure but the union wanted more people to be promoted faster.

The DFS said the deal included "cost intensive" measures to reclassify employees in higher-paying jobs, meaning personnel costs would rise 9 per cent.

Germany's economy recovered well from the recession in the wake of the financial crisis, but the eurozone's debt crisis is weighing on this year's growth prospects. Analysts say a full-scale strike by the air controllers would come as another hit to the weakening recovery.