German airline cancelled 290 flights Friday, grounding 37,500 passengers, as cabin staff began a week-long blitz of walkouts in a long-running battle over savings aimed at fending off competition from low-cost rivals.

Of the cancelled flights, 23 were inter-continental services, Lufthansa said in a statement.

The flight attendants' union UFO initial stoppage began at 1300 GMT on Friday and affected flights to and from the airports of Frankfurt and Duesseldorf.

The union also announced a second, much-longer walkout on Saturday to turn the heat up on management.

Saturday's stoppage would also hit Frankfurt and Duesseldorf and would begin at 0500 GMT and last until 2200 GMT, UFO said.

"We regret that is has come to this escalation, but negotiations (with management) have reached a point where there is no alternative but to strike," it said.

The group's subsidiaries Germanwings, Eurowings, Lufthansa CityLine, SWISS, Austrian Airlines, Air Dolomiti and Brussels Airlines are not being targeted by the industrial action.

Lufthansa said it "regretted" the union's action and apologised to passengers, saying the short notice of the strikes made it difficult to inform them in time and enable them to make alternative travel arrangements.

"We will do everything possible to keep disruption to a minimum," it said.

UFO plans to stagger the walkouts and target different airports over the course of the next seven days, with a repeat of the stoppages planned in Frankfurt and Duesseldorf on Saturday.
However, Lufthansa's Munich hub would not be affected at all this weekend, given that school holidays were still on in the southern regional states of Bavaria and Baden-Wuerttemberg, it explained.

- No strikes on Sunday -

In addition, "no industrial action is planned at all on Sunday since most people travelling that day will be doing so in a private capacity," UFO said.

UFO had announced on Thursday that industrial action was "unavoidable" after management had failed to come up with an improved offer in a long-running dispute over pay and early retirement provisions.

Lufthansa said it has provisionally booked 2,500 hotel rooms in and around Frankfurt for passengers grounded by the strikes.

Lufthansa insisted that it had conceded to all of the union's demands.

The UFO union said it would give sufficient advance warning of when the strikes will take place.

It is first time that cabin staff have staged walkouts in the nearly two-year-long dispute.

UFO is demanding the current system of early retirement provisions remain unchanged, but Lufthansa argues that the system is too expensive as it faces cut-throat competition from low-cost operators such as Ryanair and Easyjet.
The dispute with cabin staff is separate from a long-running battle between management and pilots over company plans to change the pilots' early retirement arrangements.

Lufthansa wants to scrap an arrangement under which pilots can retire at 55 and receive up to 60 percent of their pay until they reach the statutory retirement age of 65.

Pilots, who are concerned about Lufthansa's aim to further develop its low-cost activities, have staged repeated walkouts during the dispute.

Last week, Lufthansa said it was raising its full-year forecasts after low oil prices and positive passenger numbers lifted profits in the third quarter.

Investors appeared unperturbed by the latest stoppage and Lufthansa shares were the biggest gainers on the Frankfurt stock exchange on Friday, adding as much as 3.22 percent by mid-afternoon in a generally softer market.