German flagship carrier Lufthansa expects a four-day strike by pilots to cost at least 100 million euros ($136 million), the company's deputy chief executive said.

"It's going to be an impact of about 100 million euros, or 25 million euros per day. That's the pure cash effect," Christoph Franz told a news briefing on Thursday.

Pilots' union Vereinigung Cockpit (VC) said on Wednesday that Lufthansa pilots in Germany would strike as a dispute over pay and job security came to a head.

After the strike has ended, it will take days until airline traffic has normalised, Franz said. On top of that, ticket sales have already started to suffer as businesses book flights with other carriers in anticipation of disruptions at Lufthansa.

At the core of the dispute is pilots' concern that Lufthansa could increasingly shift jobs to subsidiaries where their counterparts are paid significantly less.

Lufthansa last year completed a shopping spree that saw it add Brussels Airlines, Austrian Airlines and BMI to its stable, while also starting up its own airline in Italy, called Lufthansa Italia.

Lufthansa's pilots have offered to forego pay increases if in return they get some control over which routes or pilot jobs are transferred to other group airlines.

Lufthansa's management, meanwhile, has said that VC's demands would require ceding control over parts of business strategy to its workers and the union.

"We have said that we will make some concessions. But the union's ideas are far beyond what is doable," Lufthansa management board member Stefan Lauer said during the brizfing.

Loggerheads
The dispute puts Franz, the crown prince to Chief Executive Wolfgang Mayrhuber's aviation empire, to the test less than a year after he assumed his office. Franz is determined to slash 1 billion euros of costs to make a leaner Lufthansa group.

"This is a problem of competitiveness," he said, adding that Lufthansa has lost as much as 50 percent market share on routes within and from Germany over the past five years.

Both Lufthansa and VC have said that they are prepared to resume negotiations but have not raised much hope that a compromise can be found before the strike.

"In our view, the negotiations are very difficult as Lufthansa needs significant cost savings and the pilots should contribute substantially. Hence, a longer-lasting strike cannot be ruled out," said Equinet analyst Jochen Rothenbacher.

The last major pilot strike at Lufthansa, a three-day walkout in 2001, forced the airline to cancel hundreds of flights. It led to a 125 million euro increase in staff costs and caused financial losses of 75 million euros.

Lufthansa is examining whether the strike planned now is legal, Lauer said at the briefing. Cabin crew at British Airways had to call off a planned 12-day strike over Christmas after a court ruled the stoppage unlawful due to breaches in balloting rules. (Reuters)