BERLIN, Aug 11, 2007 (AFP) - German charter airline LTU reached a pay deal with its pilots in overnight talks, staving off the threat of a strike, the company said Saturday.

A three percent pay increase will be backdated to January, the Duesseldorf-based airline said. Another two percent will be paid from July next year.

The pilots, who staged warning action last week, causing delays on some flights, also secured job guarantees ahead of LTU's takeover by low-cost airline Air Berlin.