Austrian Airlines' unit in emergency cost cuts

VIENNA - Austrian regional carrier, Tyrolean, a unit of cash-strapped Austrian Airlines (AUA), adopted emergency cost-cutting measures Thursday, including lower pay and short-time work, AUA said.

By (AFP)

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Published: Thu 5 Feb 2009, 9:11 PM

Last updated: Thu 2 Apr 2015, 3:53 AM

Management and unions at Tyrolean reached an agreement on a temporary deferral of pension payments, short-time working and a voluntary pay reduction of five percent for its 600 ground personnel, AUA said in a statement.

Tyrolean chief Manfred Helldoppler and the head of the employees' council Maria Gstaltmeyr expressed satisfaction at the outcome.

"We were able to reach a solution rapidly and make a contribution that will help the whole AUA group overcome the crisis," the two said.

Last week, parent company AUA unveiled plans to cut costs by 225 million euros (289 million dollars) this year to cope with a collapse in demand.

The loss-making airline, which is in the process of being taken over by German flag carrier Lufthansa, said it planned to save around 115 million euros by cutting capacity by 10 percent, dropping services to Mumbai, Burgas and Baia Mare.

An additional 110 million euros would be saved via other measures such as flexible working hours, a requirement for staff to take accumulated holidays plus temporary deferral of salary and pension payments.

In addition, negotiations would be held with external suppliers on ways of cutting costs.

AUA's joint acting chiefs, Peter Malanik and Andreas Bierwirth, welcomed the agreement at Tyrolean.

"Our colleagues at Tyrolean have shown that it is possible to reach a solution in a very short period of time," they said.

In December, Lufthansa signed a deal to acquire a 41.6-percent stake in AUA from the Austrian state holding company OeIAG for the symbolic sum of one euro cent per share or just over 366,000 euros in all.

That sum could eventually reach 162 million euros, depending on AUA's future performance and the price of Lufthansa's shares over the next three years.

Another condition of the deal was that the Austrian state absorb 500 million euros of AUA's debts, or more than one third of the total 1.4 billion euros.


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