Lufthansa pilots strike again, with no end to dispute in sight

BERLIN (Reuters) - Lufthansa pilots began the first of two days of strike action on Wednesday in a long-running dispute over early retirement benefits and the carrier's cost-cutting plans which shows no sign of ending.

The German airline is trying to cut costs and expand budget operations as it tries to compete with low-cost carriers like Ryanair and easyJet in Europe and Gulf rivals such as Emirates [EMIRA.UL].

But its attempts to renegotiate collective labour agreements, including retirement benefits, have been resisted by pilots who staged 10 strikes last year.

Wednesday's strike, the second this year, affects short and medium-haul operations at Lufthansa's namesake brand and the carrier has cancelled 750 out of a scheduled 1,400 flights. Another walkout has been announced for Thursday, hitting long-haul and cargo flights.

Equinet analyst Jochen Rothenbacher estimates the latest strikes are costing the carrier around 15 million euros a day in lost profit and said the dispute could last a long time.

"It's very very important for Lufthansa to bring their costs down to a level at which they can continue to compete. IAG has already done a good job of this" he said.

Lufthansa is not the only European carrier to have faced disputes with pilots over efforts to keep costs down - both Air France-KLM and Norwegian Air Shuttle have been hit by costly strikes in recent months.

Air France-KLM scaled back budget expansion plans after a walkout by its pilots last year.

Lufthansa Chief Executive Carsten Spohr has vowed to stay firm in the dispute. The company has said that it will increase fleet and staff numbers at its main passenger operations only if employees agree to concessions.

But a spokesman for pilots' union Vereinigung Cockpit (VC) said the aim of the strike was to make Lufthansa offer more of a compromise in the early retirement row. The pilots also want Lufthansa to agree to mediation covering early retirement benefits and other outstanding pay and cost-cutting issues, but the carrier has rejected this.

Lufthansa has called on VC to return to negotiations, but the union said no date had yet been set for talks.

The airline is due to announce its planned Thursday flight schedule shortly.

Flights at Lufthansa brands Germanwings, Eurowings, Air Dolomiti, Swiss and Austrian are unaffected by the strikes.

(Reporting by Victoria Bryan; Additional reporting by Jan Schwartz; Editing by Pravin Char)