Last Update: at 11:23

Cost-cutting measures

Austrian Airlines to axe 1100 jobs

Austrian Airlines must cut its cost. 1100 jobs are to be lost as a result. But the airline's suppliers will also not get off scot-free.

Tis Meyer/

Austrian Airlines A320: The fleet is shrinking.

The new normal will be a smaller normal. The management of Austrian Airlines expects that it will take at least three years for demand to return to pre-crisis levels. It expects to lead an airline that is 25 percent smaller than before.

That also means three years of lower revenues. To be able to bear this, the management of the Austrian Lufthansa subsidiary is planning a tough cost-cutting programme. The plan is to cut 1100 of the 6990 jobs. More than one in seven jobs could therefore disappear at Austrian Airlines.

Up to three years of short-time work

But that is not all. Wages are also expected to be cut by 13 percent on average, according to the Apa news agency. The pay cuts will be even harder for better earning employees. In addition, Austrian Airlines wants to use short-time work for as long as possible. The talk is of up to three years.

The airline’s most important partners must also tighten their belts, according to the management’s plan. It expects a 20 percent reduction in charges from Austro Control and Vienna Airport, but also from fuel suppliers, according to Apa.

Insolvency is being played out

In the event that the cost savings cannot be realised, alternative scenarios are apparently being played out. It is said that the board of directors should have been instructed to look into insolvency – meaning an Austrian variant of Chapter 11 – as well. The whole plan must be fixed by 18 May.

The management of Austrian Airlines is currently negotiating a support package with the government. The airline is demanding 767 million euros. Most of the sum is made up of repayable loans, but direct subsidies are also in the cards. However, the government is still wrestling with AUA and the parent company Lufthansa about the details.

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