Germany’s Deutsche Bahn and the GDL train drivers’ union reached a wage agreement on Friday, averting strikes that threatened passenger and freight services at a critical time for the state-owned rail operator.

The deal, confirmed by both Deutsche Bahn and a GDL spokesperson, follows months of tense negotiations over pay and working conditions for roughly 10,000 unionized staff. The union had sought a 40-point package including up to 8% wage increases, enhanced allowances, better terms for trainers, and improved company pension benefits.

The agreement comes as a first test for new CEO Evelyn Palla, who aims to delegate more responsibility to operating units while addressing heavy losses and the potential breakup of DB Cargo.