Austrian Airlines moves its flight operations into lower-cost Tyrolean Airways, pilots will have to work for less

Austrian Airlines’ (Vienna) board of directors has approved a plan to move Austrian’s flight operations to lower cost Tyrolean Airways (Innsbruck). Austrian issued the following statement:

“The Supervisory Board of Austrian Airlines has concluded the planned transfer of the company’s flight operations into its subsidiary, Tyrolean Airways. For legal reasons, the earliest possible date that this operation transfer can take place is July 1, 2012. With this decision the 220 million euro restructuring program has been formally sealed. The aim of the program was to bring the country’s largest domestic airline back into profit.

For customers nothing will change as a result of the transfer of flight operations: Austrian Airlines will remain Austrian Airlines – with a fleet of 77 aircraft serving 130 destinations around the world. For the employees of Austrian Airlines flight operations, who are 600 pilots and 1,500 flight attendants, nothing will change in terms of the workplace or actual salary. This is because, the savings should be achieved by means of level salary increases.

One flight operations for Austrian Airlines and Tyrolean:

The next step is to integrate the Austrian flight operations into Tyrolean. In March, a project organization was started with experts and managers of both companies. The aim of the working groups is to organize joint flight operations without a duplication of efforts by the end of the year. Both locations, Vienna and Innsbruck, are part of the future concept in all cases.

An overview of the work program:

• Staff: In the work package “Modernization of Collective Agreements” an agreement was found with the personnel workers´council of the Ground staff and the GPA (Union for private employees). Part of this are a zero growth wage agreement for 2013 and an agreement about the exit from the current pension fund model. Intensive negotiations with the personnel workers´council were lasting until the very last minute. Unfortunately no agreement has been reached. Therefore the transfer of flight operations into the subsidiary Tyrolean will now be realized. With the cost level of Tyrolean Airways, Austrian Airlines has a forward-looking and competitive basis for growth.

• Route network and fleet harmonization: A new flight schedule with a strategic orientation to our domestic market of Austria and strong eastern markets has been developed. The removal from the fleet of eleven medium-haul aircraft of the type Boeing 737 and the acquisition of seven Airbus A320 is underway. Essential here is that suitable aircraft types are found that allow us to carry out the necessary technical requirements, such as adjustments to the engine or cabin, as cost-effectively as possible. The retraining of pilots began back in March. This is being flexibly adjusted, depending upon the time of the successive fleet harmonisation. The “retraining pool” includes pilots of the Boeing 737 and copilots of the Fokker fleet.

• Location: An agreement has been signed with Vienna Airport to secure the common future of the two organizations, and to strengthen the development of transfer- and long-haul traffic. Overall, this should serve to expand the Vienna hub and the long-haul product being offered at the location. A good basis for doing this has been created with the new Austrian Star Alliance Terminal, which will go into operation in June 2012. In the field of handling, too, savings potentials have been identified, and the framework conditions for a long-term agreement have been defined.

• Costs and revenues: Many of the business partners and suppliers want to participate in the future concept of Austrian Airlines and support it in adapting the conditions. With an extension of contracts and cheaper conditions with more than 60 suppliers it was possible to save substantial amounts, running into millions. The revenue side includes the expansion of corporate customer business, through cooperations with Lufthansa Group and partners within Star Alliance.”

Copyright Photo: Rolf Wallner. The Boeing 737s will be phased out.

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