Lufthansa faces further strikes in the busy summer travel period after talks on pay for about 50,000 ground and cabin staff broke down on Thursday.
"The talks have collapsed," a Lufthansa spokeswoman said.
The Verdi union said it would call on workers to vote on strikes from Monday and said industrial action could start in two weeks, threatening chaos for thousands of passengers.
Verdi demanded a 9.8 percent pay rise after Lufthansa boosted operating profit by 63 percent to EUR1.38 billion euros (USD$2.2 billion) last year. The carrier aims to match that performance this year despite high fuel costs and economic weakness.
The latest round of talks between representatives of the union and Lufthansa began last Thursday, with the carrier offering a 5.5 percent raise.
Talks resumed on Wednesday, with Lufthansa sweetening its offer to 6.7 percent and a 1 percent one-off payment, but as negotiations continued on Thursday this failed to convince Verdi. Warning strikes last week had already forced the carrier to scrap more than 40 flights.
"The possibility of such a strike is completely incomprehensible," Lufthansa personnel chief and board member Stefan Lauer said. He said the airline had offered substantial concessions in the wage talks.
A second union, UFO, which represents the majority of Lufthansa's cabin staff, is meanwhile demanding a wage increase of 15 percent. But UFO is subject to a deal with Lufthansa until the end of this year whereby it is unable to strike.
While Verdi and UFO jostle for dominance among cabin staff, Lufthansa does not want to end up with separate agreements. But UFO does not want to negotiate without having the power to call strikes.
Lufthansa also faces the threat of more strikes by pilots at its CityLine, Eurowings and Germanwings regional carriers after pilots represented by the Vereinigung Cockpit union voted for unlimited strike measures in a separate pay dispute.
A strike by CityLine and Eurowings pilots on Monday forced Lufthansa to cancel more than 600 regional flights, about a third of the group's daily services