Under the deal affecting 5,000 pilots, a short-time programme putting them on curtailed work hours will be extended through 2021, along with accompanying cuts in salaries.
Collective pay increases will also be suspended during this time, according to the agreement with the union Cockpit (VC).
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The deal would help the airline save more than €450 million, said Cockpit.
The measures apply to pilots at Lufthansa, Lufthansa Cargo, Lufthansa Aviation Training and a subgroup of Germanwings pilots.
“I am pleased about the further substantial contribution of the cockpit
employees to help manage the crisis,” said Michael Niggemann, human resources and legal affairs chief at Lufthansa.
“We want to use the time covered by this crisis collective accord to agree on sustainable structural solutions with VC in response to the changed conditions and to be able to avoid layoffs even after the crisis agreement has expired.”
The airline, which received a nine-billion-euro bailout from Germany, said in November that 27,000 jobs were at risk following a collapse in demand sparked by the pandemic.
It posted a loss of €2 billion for the third quarter.