Ground staff of Germany's Lufthansa and management have reached a pay deal after a third round of negotiations.
This will avert further walkouts during the busy summer travel season, labour union Verdi and the carrier said.
Airlines across Europe are facing labour strife this summer as the rapid recovery in tourism has led to staff shortages and soaring inflation has prompted employees to demand higher wages.
The pay dispute at Lufthansa resulted in a strike last week that caused the cancellation of more than 1,000 flights.
The carrier still faces uncertainty over possible walkouts by its workers. The carrier is due to hold talks next week with pilots, who have already voted in favour of strikes.
After two years during which the global Covid-19 pandemic held back wage increases in the aviation sector and inflation now hovering around 8%, the deal announced will mean wage increases in real terms, Verdi said.
It includes a pay hike of €200 a month from July 1 this year, plus an increase by 2.5% or at least €125 a month from January 1 next year and another 2.5% from July 1, 2023.
It will mean bigger increases for lower-income staff and smaller ones for workers in higher income brackets.
For instance, for staff working at check-in counters at airports it will mean total increases of between 13.6% and 18.4%, depending on how long they have been with the company, Verdi said.
Lufthansa added that the deal would mean an increase in gross base salaries of 8.3% for workers earning €6,500 a month and of 19.2% for those making €2,000.
Also, for lower-income workers, hourly pay will be set at €13 from October 1, above the legal minimum of €12.
The union had originally demanded a 9.5% pay hike for ground staff.
"This result, which makes Lufthansa more attractive as an employer, will provide relief," Verdi negotiator Christine Behle said.
The wage agreement will run for 18 months, the parties said.
Lufthansa said this week that it expected demand for short-haul flights in Europe to drive growth at its passenger airlines this year, forecasting a return to group operating profit for the full year.
