A German court ruled Lufthansa pilots must halt a strike on Wednesday that led to the cancellation of around 1,000 flights, in an increasingly bitter row over cost cuts and pay at the airline.

The pilots' union Vereinigung Cockpit said the decision meant all pilots must return to work immediately though it was unclear when flights would return to normal.

Following strikes, it often takes carriers additional time to return planes to where they need to be to resume normal service.

The union commenced its series of strikes around 18 months ago. Initially the aim was to prevent changes to early retirement benefits but in recent months the pilots have also sought to prevent low-cost expansion at Lufthansa.

VC said the regional labour court, which overruled a decision made by a lower court on Tuesday evening to allow the strike, ruled that the original reason for the strike, the retirement benefits, had been pushed to one side and that the pilots were actually on strike for a different reason.

"We are surprised by the decision," VC spokesman Markus Wahl said. "We will review the decision and then draw the consequences for our continuing labour battle."

Lufthansa management, which welcomed the decision, has said it must achieve cost cuts in order to compete with budget rivals such as Ryanair, which are targeting the German market.

Ryanair on Wednesday raised its full-year profit guidance again, this time by 25 per cent, thanks to strong summer traffic.

German employers' association BDA had earlier said the strikes were damaging the entire German economy and the aims of the pilots were legally questionable.

"The question of which planes, which carriers and which company units to use on which routes falls under the freedom to make commercial decisions and should not be attacked through industrial action," BDA President Ingo Kramer told a regional German paper. - Reuters