But the two sides agreed to not include a wage-freeze option only permitting the company greater leeway to decide the extent of wage increases.
The decision comes after the union Thursday agreed on a 3.2-percent pay raise for the year of 2016 after 14 rounds of negotiations with the management since April of last year.
The union workers will receive a one-time, retroactive pay increase later this month under the agreement, a Korean Air spokesman said.
Separately from the agreement with union workers, the company is still in wage talks with its pilots, who have been asking for meaningful increases in salary.
Korean Air will focus on shifting to a profit this year despite a challenging business environment, a corporate statement said.
In a major blow to the airline, China banned on the sale of travel packages to South Korea from March 15 in retaliation against the deployment of an advance US missile defense system here. Beijing has opposed the deployment, arguing it could be used to spy on its military.
In 2016, Korean Air posted a net loss of 556.84 billion won ($493 million), slightly narrowing from a loss of 562.97 billion a year earlier.
As the company injected about 800 billion won in financial aid to its now-defunct affiliate Hanjin Shipping Co. and took losses from investments made in the shipper, the airliner could not make a profit last year, the spokesman said. 
In the January-March quarter of this year, Korean Air said it shifted to a net profit of 559.17 billion won from a net loss of 174.90 billion won a year earlier.
But China's travel ban is expected to weigh on second-quarter earnings results though the company has increased service on routes to Japan and other Asian countries since March. (Yonhap)