Lufthansa has reached agreement with pilots’ union Vereinigung Cockpit in a long running dispute over job security at the airline.

In exchange for a pay freeze until March 2011 pilots have received assurances their positions are safe.

“We agreed on the salary freeze to ensure Lufthansa’s future competitiveness,” Cockpit union spokesman Joerg Handwerg told The Associated Press.

While stating he believed the deal was a “fair compromise”, Mr Handwerg added the deal would still have to formally approve by union members.

Industrial Action

As many as 4,000 pilots at the German flag-carrier had been embroiled in the dispute, with concerns raised Lufthansa may attempt to cut costs by outsourcing posts to European subsidiaries.

Fears were heightened earlier this year following deals with British Midland Airways and Austrian Airways.

Pilots subsequently walked out in February, but further strike action was called off in April with pilots agreeing to arbitration talks.

Lufthansa – Europe’s largest airline – has been attempting to cut costs in the face of rising fuel prices, a slump in demand and increasing competition from budget carriers.

The Cologne-based owns or holds significant stakes in airlines including Swiss International Airlines, Austrian Airlines, JetBlue of the United States and Britain’s BMI.