Pilots at Lufthansa started a second day of walkouts on Tuesday, grounding long-haul and cargo flights in addition to domestic and European routes, with thousands of travellers stranded.

The two-day pilot strike, the ninth this year in a drawn-out dispute over an early retirement scheme, has forced Germany's flagship airline to cancel close to half of all scheduled flights for Monday and Tuesday. About 150,000 passengers are affected.

Pilots' union Vereinigung Cockpit (VC), representing about 5,400 Lufthansa pilots, is fighting to retain a scheme allowing pilots to retire at age 55 and still receive up to 60 percent of their pay before regular pension payments start at 65.

Lufthansa has said it would not accept a demand that new pilots, as well as those already with the company, should be able to retire at 55.
 
 It says it expects pilots to make a contribution to cutting costs at the group as it battles stiff competition from budget airlines like Ryanair (RYA.I) and easyJet (EZJ.L), as well as Gulf-based carriers.

"But just lowering wages doesn't help with respect to Ryanair. But a new offer that we can talk about would," VC board member Joerg Handwerg told German newspaper Tagesspiegel on Tuesday.

The Germany-wide strike is to last until 22:59 GMT on Tuesday. Germanwings flights are not affected.

Industrial action in the dispute has already wiped 160 million euros off Lufthansa's operating profit, adding to pressure from a stuttering global economy and increased competition.

The carrier lowered its profit guidance for 2015 for a second time this October, and is expanding low-cost operations to better compete with rivals.

Its supervisory board is expected to approve plans by chief executive Carsten Spohr at a meeting on Wednesday for low-cost expansion, including a foray into low-cost long-haul.

Lufthansa still voiced optimism on Tuesday that the dispute could be resolved if the two parties resumed negotiations.

"I do believe that we can find a way. The talks of recent weeks were really good," Lufthansa spokeswoman Barbara Schaedler told Deutschlandfunk radio. – Reuters