BERLIN (Reuters) -Lufthansa's leisure subsidiary Discover Airlines has agreed to increase wages for cockpit and cabin staff, marking its first collective bargaining agreement since it began operating in 2021, the company and union said on Friday.

The agreement covers 500 cockpit workers and 1,400 members of the cabin crew and is valid until the end of 2027, both sides said.

The Verdi union negotiating on behalf of staff said the deal with Discover Airlines would lead to wage increases of up to 38% for cabin staff and at least 16% for pilots.

Discover hailed the agreement, with its term of over three years, as a boost to passengers' planning security, after repeated strikes at various airlines hit the travel sector in recent years.

Discover Airlines CEO Bernd Bauer said the agreement was an important milestone for the young airline but warned of downsides to the deal.

"We must not ignore the fact that the agreement is also accompanied by significant cost burdens and restrictions on our planning flexibility," Bauer said in a statement.

The deal with Verdi also doesn't rule out the threat of future strikes, as competing unions protest the outcome and demand their own collective bargaining agreements.

Strikes at Lufthansa and its subsidiaries, including indirect effects such as customers avoiding the airline, have cost the group almost half a billion in earnings, according to the company.