Germany's Lufthansa and a union representing cabin crews agreed Friday, Sept 7 to take their bitter pay dispute to arbitration after flight attendants walked off the job at airports around the country, forcing the airline to cancel hundreds of flights, according to AP.

The flight attendants started their 24-hour walkout at midnight Thursday in a battle with the airline, which is struggling to compete against European budget carriers and government-owned airlines from the Persian Gulf.

The strike was the most extensive of three work stoppages over the past week after 13 months of contract negotiations between Lufthansa and the UFO union broke down over differences on pay, and union demands that the airline agree not to outsource jobs or employ temporary cabin crew employees.

Late Friday, the two sides moved to turn down the heat in the dispute. They agreed to launch an arbitration process — a move that will put any further strikes on hold from Saturday until both sides have decided whether to accept or reject the result, Lufthansa said.

Lufthansa and UFO aim to agree by the end of next week who the arbitrator will be, the airline added in a statement.

The two sides already had appeared to be edging back to the negotiating table. UFO chairman Nicoley Baublies said earlier Friday that he had talked with Lufthansa during the night, and the union was not going to stage any more strikes immediately — offering a "pause for Lufthansa to think things over."

A few hours later, Lufthansa publicly offered a concession. It said that it would stop using flight attendants on outside contracts in Berlin — one thing UFO has objected to — and would offer those attendants Lufthansa staff status next year.

CEO Christoph Franz said that was "a big step" and that he hoped it would help the union to enter "constructive talks."