UPDATE 1-Air France KLM reaches pensions deal with KLM staff

* Changes will have Q3 impact of 311 mln euros

* KLM to make a one-off payment of 194 mln euros

* Rival Lufthansa struck pensions deal this month (Adds detail, background)

PARIS, Oct 23 (Reuters) – Air France KLM has struck a pensions deal with its KLM pilot and cabin staff unions, which the airline said would incur a 311 million euro ($366 million) hit in the third quarter.

The deal changes the KLM pension to a defined contribution scheme and yearly contributions will have limited volatility, the company said, adding that KLM will make a one-off lump sum payment of 194 million euros to the pension fund.

The changes follow similar moves by other airlines, for whom pension scheme arrangements have been a source of tension with employees.

Rival Lufthansa and its main pilots union signed a wide-ranging agreement on pay, pensions and conditions this month. In September British Airways proposed the closure of a large pension scheme, angering trade unions representing workers who had already taken industrial action this year in a continuing pay dispute. ($1 = 0.8499 euros) (Reporting by Sudip Kar-Gupta; Editing by David Goodman)

Article Courtesy of CNBC