Austrian Airlines implements further restructuring measures; cuts another 650 jobs

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Austria’s red-white-red flag carrier has used the challenging months of the coronavirus crisis to make extensive preparations for the future like fleet adjustments (divesting from smaller types of aircraft such as the Dash and the Airbus A319) and centralization of flight traffic in Vienna, its home base. 

The national airline already cut back on its total staff by 650 full-time positions up until the end of February 2021 through natural attrition. However, Austrian Airlines will have to further reduce its personal capacities by cutting more than 650 additional jobs by the year 2023.

Comprehensive multi-year anti-crisis packages were put together in 2020 on the basis of agreements reached with the staff as well as suppliers and system partners in order to ensure a favorable long-term earnings development and the airline’s ability to repay loans. Austrian Airlines also recently announced a reduction of its office infrastructure, in which four out of eight floors of the Austrian Airlines Head Office are given back to the Vienna Airport operating company Flughafen Wien AG. “We are aware of our responsibility to the Austrian population and want to repay our debt as quickly as possible as soon as a market recovery sets in”, explains Austrian Airlines CEO Alexis von Hoensbroech.

Prolonged duration of the crisis requires further measures

Like many other companies in the country, Austrian Airlines is fighting its way back to normalcy. “The pandemic is lasting significantly longer than expected, and the effects will be felt for several years. That is why we will not be able to achieve the earnings targets, which we defined last spring. For this reason, we are implementing further measures now in order to sustainably safeguard the future of our Austrian Airlines”, states von Hoensbroech. The Austrian Airlines CEO is referring, amongst other measures, to renewed adjustments made to the fleet plan, presented to employees in a virtual town hall meeting today. In order to limit the risk arising from a slower market recovery, two further Airbus aircraft will be relegated to long-term parking.

Accordingly, the current total fleet of about 80 aircraft will be reduced even more to 58 instead of the originally planned number of 60 planes, at least until 2024/25. The airline also plans to increase fleet productivity at the same time. Together with a large number of other measures, this will also impact the mathematical surplus of personnel after the crisis.

The national airline already cut back on its total staff by 650 full-time positions up until the end of February 2021 through natural attrition. However, Austrian Airlines will have to further reduce its personal capacities by cutting more than 650 additional jobs by the year 2023. This will not be achievable in all areas by means of natural attrition. The company maintains its goal of laying off as few people as possible.

With this in mind, the airline is assessing the possibility of part-time work models to temporarily reduce personnel capacity. “In spite of this unprecedented crisis, we want to secure as many jobs as possible”, CEO von Hoensbroech emphasizes. But one thing is certain. “Austrian Airlines will be completely different after the crisis. The company will be leaner, more digitalized and more modern and reconnect Austria with the world with its long-haul hub”, he adds.

Increase in bookings for the summer of 2021 gives cause for optimism

Our liquidity cushion continues to be good, and we have faith that there will be a market recovery in the summer of 2021. We expect a sufficient number of people will be vaccinated throughout Europe by that time so that travelling will not have to go hand in hand with travel restrictions and travel bans any longer”, explains Michael Trestl, Member of the Executive Board and Chief Commercial Officer.

The booking situation for this year’s holiday season is showing a positive development. The offering of long-haul flights will also be increased starting at Easter. New bookings for the peak season are being registered every day, for example, lately a 50 percent increase in new bookings for June through August in the last two weeks, compared to bookings in January for the same period. In turn, this makes the management of Austria’s flag carrier optimistic for the future. “One will hardly be able to hold people back from travelling thanks to the digital Green Pass in their bags”, Trestl concludes.

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