FRANKFURT: Lufthansa pilots began a four-day strike on Monday in a bitter dispute over job guarantees, grounding a predicted two-thirds of its 800 daily flights and causing chaos at German airports.

The German flag carrier, already reeling from years of upheaval in the global airline sector, has estimated that its biggest walkout in nine years will cost it around 65 million euros (88 million dollars).

Worst hit will be Lufthansa's Frankfurt hub, Europe's third biggest airport, and Munich. Also affected was Lufthansa Cargo, one of the world's biggest freight carriers, and its low-cost subsidiary Germanwings.

Experts warned of damage from the strike to the economy, Europe's largest, which is only just beginning to recover from its worst recession since World War II.

Despite last-ditch talks and appeals from top politicians, including Transport Minister Peter Ramsauer, the 4,000 pilots from the Cockpit union on Sunday reiterated their intention to walk off the job at midnight (2300 GMT).

"Lufthansa management is not interested in dialogue, although it won't admit it," union spokesman Joerg Handwerg told AFP.

"We are open to talks without preconditions," said Lufthansa spokesman Klaus Walther, saying that if the union "withdrew its catalogue of unrealistic and illegal claims ... a deal would be swiftly found."

Cockpit is pressing for a 6.4-percent pay raise but more importantly it wants commitments from Lufthansa that pilots will not lose their jobs as the firm shifts passengers to cheaper foreign affiliates.

But Lufthansa says that this is "pure invention."

"Not one job has been moved. No Lufthansa pilot's job has been scrapped and no job cuts are planned at the moment," said Christoph Franz, deputy chairman, in a statement.

European airlines have been fighting for survival for several years as they battle with the triple threat of low-cost airlines poaching customers, soaring high fuel costs and the worst global recession in decades.

Lufthansa has made a number of smaller acquisitions such as BMI, the former British Midland, and Swiss, the remnants of the bankrupt Swissair, and is cutting overheads by a billion euros (1.4 billion dollars).

But the pain remains. Sales slumped 13 percent in the first nine months of 2009, the last figures available, with operating income down 76 percent. It warned a positive full year result was subject to "very considerable risks."

Pilots were poised to stage demonstrations early Monday at Frankfurt airport.

The carrier, which operated around 800,000 flights last year, said it had set up a hotline and was allowing customers to change bookings free of charge, or to give them train tickets.