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Lufthansa and a pilots' union have accepted pay recommendations from a mediator, though the airline said it planned to offset the cost by using more crew on cheaper contracts in a move that could jeopardize the deal. Lufthansa, which has been dogged by a succession of strikes, said on Wednesday it had agreed to increase pay for 5,400 pilots by 8.7% in several steps, as well as one-time payments worth a total of E30m, adding around E85m to its annual costs. The agreement boosted Lufthansa shares, which were up 1% by 1221 GMT and among the top DAX gainers. To make up for the added expense, Lufthansa said 40 new aircraft due for delivery would be staffed not by crew on collective labour agreements at its core brand, but by crew from elsewhere within the group. Board member Harry Hohmeister had last month raised the prospect of shifting new planes to other parts of the group or even setting up a new unit to keep costs down. Pilots' union Vereinigung Cockpit (VC) said the proposals would be put to a vote of members, with a result expected by the end of March, but spokesman Markus Wahl said the plans to shift the planes could affect the outcome.<br/>

Lufthansa, competing with the Middle East’s biggest carriers to carry Indian international traffic, said it will seek to expand ties with Jet Airways, which will help its customers get access to more connecting flights in the South Asian country. Lufthansa, which is deepening its partnership with Etihad Airways, connects Germany with five Indian cities and customers will then be able to fly Jet Airways for their onward journey to other places within the country, CEO Carsten Spohr said. Etihad owns 24% of Mumbai-based Jet Airways. “We have connecting flights from Jet on arrival in five key cities we serve ourselves,” he said. “So there’s room for improving that.” Lufthansa, seeking a bigger slice of the Indian passenger traffic, wants to lure more flyers to and from the nation’s second-tier cities with convenient connecting services offered by Jet Airways. The airline sees growth coming from beyond the five major Indian cities it flies to, Wolfgang Will, Lufthansa’s senior director for South Asia said separately. Long-time adversaries Lufthansa and Etihad said earlier this month that they are targeting deeper tie-ups in cargo, procurement, information technology and new code-share routes, and could form a full joint venture. <br/>

When it comes to maintaining domestic air superiority, US carriers have been shaking their fists at Persian Gulf airlines that have rapidly increased their American presence. Yet there’s another threat that may be growing in their own backyard—or more precisely, just north of it. Air Canada has been around for 80 years, but only recently sought to parlay torrid growth into global ambition. The company aims to turn its three major Canadian hubs into larger transfer points for global travelers crossing North America. Flying to Europe or Asia? Try Toronto, Montreal, or Vancouver as your connection—you may very well like these airports far more than Chicago, New York, or Los Angeles, Air Canada is telling travelers. And the carrier isn’t shy about singing its own praises. “Every time an American flies up on us they go ‘Oh my God, you’re the best kept secret. How did we not know about this?’” said Ben Smith, Air Canada’s president of passenger airlines. “That is what’s music to my ears.” Air Canada’s full-year 2016 results are expected Friday, and will probably continue a remarkable financial turnaround that began after what CEO Calin Rovinescu described as “the near-death crisis years” of 2008-2009. The carrier has been radically increasing its international footprint, and in Q2 and Q3 of 2017 will become the champion of long-haul capacity growth. As it ramps up seasonal flying this spring, Air Canada’s total long-haul capacity will exceed 18%, surpassing Emirates, which has been adding new routes from Dubai to just about everywhere. In the summer quarter, long-haul seat growth will top 10%. With these powerful numbers as a backdrop, Air Canada is launching an all-out assault to the south. In May, the airline launches new service to a half dozen US cities, including smaller markets such as Memphis and Savannah, Ga. These will further expand a global route map that stretches from Algiers to Reykjavik and Taipei to Tel Aviv. The airline is also scouting Africa for future destinations. <br/>

THAI has admitted it is struggling to sell its decommissioned Airbus A340 aircraft as they are unpopular in the used plane market, the national flag carrier's public relations unit says. The airline's statement came after a group of about 100 THAI staff on Sunday called for Prime Minister Prayut Chan-o-cha to invoke Section 44 of the interim constitution to probe the procurement of 10 Airbus A340 planes bought by the national flag carrier, which have been grounded and "left to rot". The aircraft acquisition process took place between 2002 and 2003. The group said the use of the aircraft had caused annual losses of 3-5b baht for THAI which is why they had to be grounded. They are parked at Don Mueang and U-Tapao airports. According to THAI's statement, the Airbus A340s were purchased when the cost of jet fuel was low and were used to compete on intercontinental routes. "When the cost of jet fuel became expensive, other carriers with the same aircraft type in their fleet also experienced the same problem as THAI of incurring losses and decommissioned this type," the statement says.<br/>