Deutsche Lufthansa AG, Europe's second-largest airline, said it's grounding about 360 flights on Thurday as pilots at the CityLine regional unit strike over pay. All airports in Germany served by the division are affected by the cancellations of domestic and regional European flights, Claudia Lange, a spokeswoman for Lufthansa in Frankfurt, said in an interview. Long-haul flights are operating normally. The Vereinigung Cockpit pilots union began the 36-hour walkout at midnight German time. CityLine operates 50- to 93-seat aircraft, which connect passengers to Cologne, Germany-based Lufthansa's mainline service. The carrier said it didn't have information on cancellations tomorrow. The union has rejected Lufthansa's offer to increase CityLine pilots' wages by 5.5 percent in two steps and pay bonuses of 7,000 euros ($10,800) for captains and 5,000 euros for co-pilots. Cockpit wants the CityLine pilots' pay to match their counterparts' wages at Lufthansa's main service. Lufthansa fell as much as 44 cents, or 2.8 percent to 15.19 euros as of 1:09 P.M. in Frankfurt trading, valuing the company at 6.96 billion euros. The decline brought the stock's drop this year to 17 percent. The strike extends a period of labor turmoil at the airline as the aviation industry grapples with kerosene costs that have more than doubled over this past year. Lufthansa ended a five-day walkout by baggage handlers, mechanics and flight attendants on Aug. 1 after agreeing to a 7.4 percent, two-step pay raise. Rising fuel prices have contributed to least 24 airlines seeking bankruptcy protection or halting flights in the first half of 2008.
