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German airline Lufthansa has cancelled almost half of its long-haul flights, as pilots strike for the second time in a week over retirement benefits.

Pilots went on strike at 02:00 GMT, and the action is due to continue until 22:59 GMT. Up to a third of cargo flights have also been cancelled,

Lufthansa called the strike action by pilots' union, Vereinigung Cockpit, "completely incomprehensible".

This is the 10th strike for the airline since April.

The airline's pilots oppose plans to phase out an early-retirement scheme.

Currently, pilots are able to retire at the age of 55 and receive up to 60% of their pay until the standard retirement age of 65.

Almost 50% of long-haul flights from Frankfurt and Munich airports will remain grounded.

Lufthansa Cargo will operate nine out of 15 flights.

The airline said the flights that went ahead would be staffed by volunteer pilots.

Expansion

The strike comes as Lufthansa's board voted to push ahead with plans to expand its budget flight operations on Wednesday. And chief executive Carsten Spohr warned that further strikes as a consequence of the board's decisions might be something Lufthansa would "have to live with".

As well as short-haul routes inside Europe, Eurowings will also offer long-haul flights in conjunction with SunExpress Germany, Lufthansa's joint venture on Mediterranean routes with Turkish Airlines.

Lufthansa will initially lease three Airbus A330-200s, and flights to tourist destinations in Florida, South Africa and the Indian Ocean will start at the end of 2015 from Cologne.

The board also approved the lease of up to seven A330-200s and Mr Spohr said if the plan was successful the airline would have no problem in expanding further He said he did not foresee any difficulty in finding pilots for the Eurowings expansion.

"We hope that we won't have any more strikes for the sake of our passengers, shareholders and employees," he said. "But we have set the path so that Lufthansa can have a future and strikes are the consequence that we have to live with."

Competition

Lufthansa has offered mediation with the pilots in the hope of resolving the dispute in time for Christmas.

The airline is battling to remain competitive against budget carriers such as Ryanair and Easyjet and Gulf operators including Emirates, Etihad and Qatar on lucrative long-haul routes.

It has already lost €160m (£125.5m) in operating profit as a direct result of the dispute over proposed changes to an early retirement scheme.

Lufthansa is also not alone in struggling to cut costs to counter the threat to their survival from leaner rivals.

Air-France KLM faced two weeks' of pilots strikes over its plans to expand its low cost carrier Transavia in September forcing it to backtrack on plans to expand.

On Wednesday, it said a majority of its pilots now backed a deal to expand the company's low-cost operations in France, said more than 200 Air France pilots had volunteered to fill 72 positions at Transavia France.