Germany's Lufthansa will not give in to pilots who began a two-day walkout on Tuesday and threatened further strikes in their long-running dispute over cost cuts, retirement benefits and pay, the airline said.

Lufthansa was forced to cancel 84 of about 170 long-haul flights planned for Tuesday from Frankfurt, Munich and Duesseldorf, expects several hundred cancellations on Wednesday and was told by pilots' union Vereinigung Cockpit that further industrial action could be taken.

"We cannot rule out further strikes this week," union spokesman Markus Wahl said at Frankfurt airport on Tuesday. "Strikes are possible in the following weeks as well."

The pilots' 13th strike inside 18 months drew a defiant response from Germany's largest airline.

"We are determined ... The pilots are going about this the wrong way," a Lufthansa spokeswoman said.

Relations between management and Vereinigung Cockpit soured last week after the breakdown of talks aimed at resolving a dispute that initially centred on retirement benefits but has since escalated to encompass Lufthansa's plans to expand low-cost operations under its Eurowings brand.

The strikes have cost Lufthansa about €100 million ($112 million) so far this year.

Tuesday's action affects long-haul passenger and cargo flights out of Germany from 0600 GMT to 2159 GMT and a 24-hour walkout on Wednesday targets short-haul Lufthansa and Germanwings flights. Lufthansa said it will publish a list of Wednesday's cancellations later on Tuesday.

Lufthansa, which is trying to cut costs to better compete with budget rivals in Europe, was able to keep some long-haul flights and its cargo flights running on Tuesday thanks to some pilots offering to work during the strike.

Pilots have offered concessions, including a proposed increase in the average retirement age to 60 and a commitment to look at ways to reduce costs to a level comparable with easyJet. But they have also demanded that the company stops moving jobs out of Germany as it seeks to expand low-cost operations.

All other employees have done their bit to reduce costs, Lufthansa's head of personnel, Bettina Volkens, said on Monday after the pilots announced that its latest action would be extended into Wednesday.

Fellow union UFO, which represents cabin crew, also waded into the debate last week, saying that the row has already cost jobs and that strikes will not bring a resolution. - Reuters