Lufthansa and its main cabin crew union on Friday agreed upon preliminary deals on wages and pensions. The aviation giant also came up with a mediation scheme for other areas of dispute that would see cabin crew strikes ruled out until the end of June.

The pay deal runs until September 2016 and sees around 19,000 cabin crew receiving a one-off payment of 3,000 euros ($3,250) for 2015, plus a pay rise of 2.2 percent from Jan. 1, 2016.

A few details on pensions still remained to be negotiated, Lufthansa said in a statement, expressing hope that they would be settled by Feb. 15. Failure to reach an agreement on pensions would automatically pass the issue on to a mediation panel, where it would have to be settled by June 30, the airline added.

Lufthansa and cabin crew union UFO have been at loggerheads over a range of issues from pay, pensions, conditions and early retirement benefits, culminating in November 2015 when the union staged the longest-ever strike in the German carrier's history.

Lufthansa is trying to cut costs as it battles to compete with low-cost rivals in Europe on short-haul routes and fast-growing Gulf carriers on long-haul flights. The attempt, however, has met strong opposition from unions.

The agreement with cabin crew follows an earlier deal struck by the airline with ground staff, who also chose to accept a change to their pension system involving fixed payments by the company. The airline's pay dispute with its pilots is still ongoing after 13 incidents of strike action last year.

After the announcement on Friday, Lufthansa shares extended gains and were up by more than 2 percent, outperforming Germany's blue-chip DAX index.

uhe/pad (dpa, Reuters)