FRANKFURT (Reuters) - Lufthansa's <LHAG.DE> budget airline Eurowings and cabin crew union UFO have agreed to hold talks on Sunday to try to resolve a years-long dispute over pay and working conditions and avert further strikes.


Eurowings said on Friday it aimed to hammer out an agreement with UFO quickly, adding mediation would be the best way to achieve this.


Lufthansa's Germanwings unit, which is being merged with Eurowings, has separately asked UFO to resume talks next week, Eurowings said.


Lufthansa cabin crew and pilots have embarked on a series of strikes over the last few years as the airline battles to reduce costs in order to compete with low-cost rivals and long-haul carriers with leaner cost bases.


On Thursday, cabin crew staged a 24-hour walkout at both Eurowings and Germanwings after talks on new contracts at Eurowings collapsed, forcing the two budget carriers to cancel hundreds of flights.


UFO has threatened to call for two more days of strikes next week.

Eurowings put forward a new offer last week that includes an average pay increase of around 7 percent. At Germanwings, UFO said it has failed to reach an agreement on part-time contracts.

(Reporting by Maria Sheahan; Editing by Edward Taylor and Mark Potter)