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Lufthansa_CEO_Christoph_Franz_has_made_clear_that_affiliate_Austria_Airlines_(AUA)_has_to_cut_its_expenses.

Franz warns AUA

Lufthansa CEO Christoph Franz has made clear that affiliate Austria Airlines (AUA) has to cut its expenses.

Franz told the Manager Magazin that AUA must not be regarded as a "protected area". He appealed to the Viennese carrier’s executive board to accelerate the current austerity procedure. Aviation experts do not expect the chiefs of the struggling airline to meet the targets Lufthansa confronted them with.

The board of Europe’s biggest name in aviation wants its ailing Austrian subsidiary company to reduce personnel costs by 40 million Euros as early as this year. The ongoing dispute about reducing pilots’ incomes could keep AUA head Jaan Albrecht from fulfilling the goal.

Albrecht, who has headed AUA since November 2011, wants the firm’s 600 pilots to work under contracts similar to those of their colleagues at Tyrolean Airways (Austrian Arrows), a regional carrier which is part of the AUA Group. Tyrolean Airways was established in 1978, 21 years after AUA started operating.

Tyrolean Airways pilots’ wages are 25 per cent lower than those of most AUA pilots. Especially pilots who have been working for AUA for eight years or longer earn considerably more than their counterparts at Tyrolean Airways.

The executive board of AUA recently agreed with AUA supervisory board officials to enforce a reform of AUA pilots’ contracts to slash costs. Around 50 pilots consider leaving the company as a consequence, according to the Salzburger Nachrichten. Details of their contracts guarantee generous financial compensation if they decide to quit – regardless of the reasons for such a step.

Albrecht emphasised that he fully supported the Lufthansa board’s strategy. The former Star Alliance head said it was not acceptable that AUA’s personnel costs kept climbing despite a strong decline of its workforce level. He appealed to the works council to cooperate "to avoid that AUA crashes against the wall".

Albrecht’s team of negotiators reportedly managed to persuade Vienna International Airport (VIA or VIE) to lower usage costs and charges as a contribution to its budget consolidation. The Austrian government coalition of Social Democrats (SPÖ) and People’s Party (ÖVP) is rather reluctant in terms of granting financial support for the tradition-rich carrier.

AUA suffered a loss of around 60 million Euros in 2011 when it welcomed more than 11 million passengers. Around 80 airlines are operating at VIA. Nearly 51 per cent of flights are operated by AUA and other airlines belonging to the AUA Group.

VIA is managed by Flughafen Wien AG (FW). Günther Ofner and Julian Jäger co-head the firm which is quoted on the Vienna Stock Exchange (WBAG). VIA had 21.1 million passengers in 2011 (2010: 19.7 million). Over the years, the aerodrome has developed into one of the most important hubs for aviation services to destinations in Eastern Europe.

Vienna Times





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