OREANDA-NEWS. February 20, 2015. Germany's Lufthansa has set out plans for growth in fleet and staff numbers at its main airlines business in exchange for cost cuts as it tries to end a long-running labour dispute with pilots.

Lufthansa is trying to trim costs and expand budget operations to better compete with both low-cost carriers such as Ryanair and easyJet and Middle East rivals like Emirates and Turkish Airlines.

Lufthansa at a staff meeting on Thursday proposed a new pact for growth and employment at its Lufthansa German airlines unit - comprising Lufthansa and Germanwings-branded flights.

It foresees the fleet stationed at Frankfurt and Munich rising to 340 planes from the current 313 by 2010 and staff numbers at Lufthansa Passage increasing by around 1,800 from 33,500. But that is dependent on cost cuts being achieved, a Lufthansa spokesman said.

Further details will be negotiated in the coming months and Lufthansa hopes to be able to put the pact in place from September.

"We know we can't immediately close the cost gap with rivals such as easyJet or Turkish Airlines," board member Karl Ulrich Garnadt said in a statement. "But we must find a way to adapt our cost development to that of the market."

Pilots union Vereinigung Cockpit (VC) staged 10 strikes last year and held a two-day walkout at the carrier's Germanwings unit earlier this month as it tries to pressure management in a row over changes to early retirement benefits.

It is also against management plans to expand low-cost operations, fearing it could lead to worse pay and conditions, and erode jobs at Lufthansa's main brand.

The airline said it would like to immediately continue talks with labour representatives but that they would only be successful if no strikes were held.

Cabin crew union UFO has agreed to hold off industrial action for the next few months and has started talks with Lufthansa, but VC has not made a similar promise.