Category Archives: Austrian Airlines Group

Austrian Airlines finally finds labor peace with its pilots and cabin staff, flight operations to return to Austrian on March 1, 2015

Austrian Airlines‘ (Vienna) flights and aircraft (except one Boeing 777) are currently operated by Tyrolean Airways and its staff. Representatives of the pilots, flight attendants and management of Tyrolean Airways (Austrian Airlines Group) agreed on a new collective wage agreement effective December 1, 2014. The new contract will allow flight operations to once again be transferred back to Austrian Airlines on March 1, 2015. The company issued this statement:

Following a new and intense round of negotiations, the management and Works Council for the flight and cabin crew of Tyrolean Airways agreed last night on the cornerstones of a new Group collective wage agreement for the approximately 3,200 members of the flight staff. A framework agreement to this effect was already signed by the social partners. The Supervisory Board of Austrian Airlines also gave its stamp of approval to the proposal solution.

“I am relieved. The agreement is the best of all the options open to Austrian Airlines. We managed just in time to prevent the possible reorganization of the airline”, says Austrian Airlines CEO Jaan Albrecht. “The negotiating partners demonstrated a sense of responsibility. I pay tribute to them.”

The framework agreement serves as the basis for a new Group collective wage agreement which will be drafted in detail and already apply to the approximately 900 pilots and 2,300 flight attendants as of December 1, 2014. The agreement regulates future salaries and retirement benefits, working time and career development for the cockpit and cabin crew. The parties to the negotiations agreed not to disclose any details about the agreement.

“It was very difficult to find a viable solution. However, ultimately the shared desire helped us achieve our goal“, says Klaus Froese, Managing Director of Tyrolean Airways and chief negotiator on the employer’s side. “On the basis of the agreement that has been reached, especially thanks to the targeted legal certainty, we have now laid the foundations for the good development of our company.”

A key aspect of the negotiated solution is also the transfer of flight operations to Austrian Airlines effective March 1, 2015. In this connection special severance payments were agreed upon.

“Due to the agreement we now have a new starting point for a new, unified Austrian Airlines – flown by Austrian, operated by Austrian. We can now concentrate on designing the future. This includes the modernization of the fleet“, Jaan Albrecht adds.

Austrian Airlines employs a total staff of 6,300 employees. The fleet is comprised of 78 aircraft, which fly to about 130 destinations from its home airport in Vienna.

Copyright Photo: SPA/AirlinersGallery.com. Austrian Airlines’ (operated by Tyrolean Airways) Boeing 737-6Z9 WL OE-LNM (msn 30138) arrives at London (Heathrow).

Austrian Airlines: AG Slide Show

Lufthansa Group reports a lower first quarter operating loss of $341 million

Deutsche Lufthansa AG (Lufthansa Group) (Lufthansa) (Frankfurt) achieved a further increase in its operating result for the first quarter of 2014, thanks to continued progress with its Score results-enhancement program. In what is traditionally the weakest quarter of the year, the company posted an operating result of EUR -245 million ($341 million), a EUR 114 million ($158.7 million) or 31.8% improvement on the same period last year. Adjusted for non-recurring items, such as the cost for the accelerated installation of new Lufthansa Business Class seats, which accounted for some EUR 55 million in this period alone, the first-quarter operating result was improved by EUR 105 million to EUR -190 million ($264.5 million). The improved quarterly operating result can be largely attributed to an increase in profits at Lufthansa Technik and the positive impact of the revised depreciation policy for aircraft and spare engines which was adopted at the beginning of the year. In addition, the Lufthansa Group also improved its cost structures in the passenger segment.

Adjusted to eliminate fuel-price and currency factors, first-quarter unit costs for the passenger business segment were a 3.7% improvement on their prior-year level. The Group has set itself the goal of reducing such costs by 4% for 2014 as a whole by implementing various Score-related actions. Total revenue for the quarter amounted to EUR 6.5 billion, a 2.5% decline on the prior-year period. Lower traffic revenues were generated for the period, not least as a result of adverse currency movements. The revenue result was achieved with a 1.2% reduction in total flights operated, owing mainly to fleet modernizations and the use of larger aircraft. The net result for the period amounted to EUR -252 million, a substantial EUR 206 million or 45.0% improvement on the first quarter of 2013.

“This is a sound first-quarter performance and a slight improvement in our results for the period in a difficult market environment,” says Simone Menne, CFO and Member of the Executive Board at Deutsche Lufthansa AG. “We have improved our cost structures, and have taken various actions to enhance the quality of our revenues. And we will continue with our consistent efforts to further raise our efficiency.”

The Lufthansa Group has further confirmed its previous expectation of posting an operating profit of between EUR 1.3 and 1.5 billion for 2014 as a whole. The Group also remains confident of reporting a 2014 operating result adjusted for non-recurring items of between EUR 1.7 and 1.9 billion. The projections remain unchanged despite the Verdi strikes at German airports in March and the three-day strike at Lufthansa, Germanwings and Lufthansa Cargo by the Vereinigung Cockpit pilots’ union in April, which reduced Group earnings by over EUR 70 million.

“Our advance passenger bookings saw sizeable declines during the Vereinigung Cockpit pilots’ strike,” Menne continues. “And, with the competition we face on our European network and the strong pricing pressures on our North American routes, we haven’t yet been able to raise them again. So, despite the currently tense market environment, we are doing our utmost to recoup these earnings losses in our ongoing business.” Some assistance should be provided here by the fall in fuel prices: full-year estimates for this cost item are now lower following the first-quarter results than they were in March.

The Group’s Passenger Airlines business segment reported an operating result for the quarter of EUR -332 million, a EUR 31 million improvement on the same period last year. The progress here was partially due to the revised Group depreciation policy, whose lower costs added EUR 86 million to the quarterly result. At the same time, the decline in revenue per available seat-kilometre was offset by cost economies, which were reflected in a clear reduction in cost per available seat-kilometre. Among the Group’s member airlines, Lufthansa and Germanwings posted a quarterly operating result of EUR -286 million (a EUR 6 million year-on-year improvement), Swiss International Air Lines (Zurich) achieved an operating profit of EUR 6 million (up EUR 22 million) and Austrian Airlines (Vienna) posted an operating result of EUR -54 million (a EUR 2 million improvement on the prior-year period).

Lufthansa Technik made the most positive contribution to the Lufthansa Group’s first-quarter results, with an operating profit for the period of EUR 97 million, a EUR 16 million improvement on January-to-March 2013. The Group’s IT Services segment raised its first-quarter operating result by EUR 2 million to EUR 5 million. LSG SkyChefs reported a first-quarter operating result of EUR -4 million, a EUR 7 million year-on-year decline which was in part attributable to adverse currency movements. And with rigorous cost discipline in a still-tough market environment, Lufthansa Cargo achieved a solid operating profit of EUR 21 million, which compares to EUR 28 million for the prior-year period.

The first quarter of 2014 in figures

Total revenue for the first three months of 2014 amounted to EUR 6.5 billion, a 2.5% decline on the same period last year. Total operating income also declined 2.5%, to EUR 7.0 billion. At the same time, total first-quarter operating expenditure was reduced 6.0% to EUR 7.2 billion. Fuel costs for the quarter declined by EUR 157 million or 9.4% to EUR 1.5 billion. The figure includes a EUR 20 million loss from fuel price hedging activities. Fees and charges were 0.8% below their prior-year level, owing in particular to the lower flight volumes.

The Lufthansa Group achieved an operating result of EUR -245 million for the first quarter of 2014, a period that is traditionally the weakest of the year. The net result for the quarter amounted to EUR -252 million, a substantial EUR 206 million improvement on the first three months of 2013. First-quarter earnings per share rose from the EUR -1.00 of 2013 to EUR -0.55.

The Lufthansa Group increased its investments in modernizing and maintaining its aircraft fleet to EUR 755 million in the first-quarter period. All in all, the Group invested EUR 859 million, some EUR 141 million more than in the same period last year. Cash flow from operating activities totalled EUR 855 million, while free cash flow (operating cash flow less net capital expenditure) amounted to EUR 195 million. Net debt stood at EUR 1.6 billion, down EUR 61 million year-on-year. The balance sheet equity ratio as calculated in accordance with the new IAS 19 capitalization principles amounted to 17.9%, up 2.5 percentage points from the first quarter of 2013.

Top Copyright Photo: Michael B. Ing/AirlinersGallery.com. Airbus A340-642X D-AIHV (msn 897) of Lufthansa completes its final approach to the runway at Los Angeles International Airport (LAX).

Lufthansa: AG Slide Show

Germanwings: AG Slide Show

Bottom Copyright Photo: Paul Bannwarth/AirlinersGallery.com. The Lufthansa Group continues to shift more non-hub European flying to the lower-cost Germanwings. Airbus A319-132 D-AGWU (msn 5457) lands at EuroAirport.

 

 

Lufthansa’s transfer of Austrian Airlines employees to cheaper Tyrolean Airways deemed illegal by a Vienna court

Lufthansa Group (Frankfurt) in 2012 orchestrated the transfer of around 2,000 staff members of its Austrian Airlines (Vienna) subsidiary to the cheaper Tyrolean Airways (Innsbruck) subsidiary to reduce overall costs. A Vienna court ruled yesterday (September 2) that the move was illegal and the employees were still employed by Austrian Airlines.

Austrian Airlines stated it would appeal the verdict of the Vienna Labor and Social Affairs Court. The transfer was the heart of the loss-making airline’s restructuring plan and its attempt to return to profitability along with the Lufthansa Group.

Currently Tyrolean Airways is operating all Austrian Airlines-branded aircraft (except one Boeing 777) as Austrian Airlines flights. The one Triple Seven is keeping the Austrian Airlines AOC alive.

Read the full report from Euronews: CLICK HERE

Copyright Photo: Austrian Airlines-branded Boeing 777-2Z9 ER OE-LPA (msn 28698) pictured departing from Tokyo (Narita) is actually being operated Tyrolean Airways-employed crews on the Tyrolean AOC until the Vienna court deemed the crews to be considered Austrian Airlines employees again! What will now happen to the Tyrolean crews who were operating alongside Austrian crews?

Austrian Airlines: AG Slide Show

Austrian Airlines to add a leased Boeing 777-200 ER for eight years

Austrian Airlines (Vienna) is planning to add another long-range Boeing 777-200 ER aircraft to expand its international operations. The airline issued this statement:

At its meeting yesterday, the Supervisory Board of Lufthansa approved the Austrian Airlines Group the lease of an additional Boeing 777-200 ER amounting to about EUR 33 million. Austrian Airlines Group will lease the aircraft for a period of about eight years from an internationally renowned leasing company. The aircraft will be transferred to Austrian Airlines Group in spring next year. Before it is put into operation, it will be subject to a maintenance check in Vienna and equipped with the new long-haul cabin including the new modern Economy seats, the new in-flight entertainment system and the new Business Class seats which can be converted into completely flat beds. The new Boeing 777 is scheduled to take off on its first flight in the summer of 2014.

“The expansion of the airline’s long-haul offering is an integral part of the restructuring program launched in 2012“, says Austrian Airlines Chief Executive Officer Jaan Albrecht. “The long-haul market has growth potential, particularly destinations in Asia and North America. In this way we will secure our long-term competitiveness at the Vienna flight hub.”

At present the long-haul fleet of Austrian Airlines Group consists of ten wide-bodied aircraft, of which four are Boeing 777-200 aircraft and six are Boeing 767-300s. On the basis of the new Boeing 777, the Austrian Airlines Group long-haul fleet will be expanded to eleven aircraft. The most recent expansion of the long-haul fleet took place in 2007 when one Boeing 777 with the registration OE-LPD was added. The Boeing 777 is the world’s largest twinjet and has a capacity of over 300 passengers.

The airline is also upgrading its cabins on its long-hail aircraft and issued this statement:

After passing its test flight and subsequently receiving approval from the authorities, the last Boeing 777 to feature the all-new cabin, aircraft with the registration OE-LPB has been put into revenue service. This means the conversion of the Austrian Boeing 777 fleet is now complete.

A total of 1,232 new seats have been fitted in the four Boeing 777 aircraft to have been converted, 192 in Business Class and 1,040 in Economy Class. The new cabin on the Boeing 777 offers space for a total of 308 passengers. Sophisticated seat distribution allows four out of every five Business Class passengers direct access to the aisle.

The national carrier has now converted its entire Boeing 777 fleet, and two of its Boeing 767 aircraft. Some 1.1 million customers fly long-haul with Austrian Airlines every year, on 5,500 flights.

On the financial side, the Austrian Airlines Group reported an operating loss of $73.5 million for the first quarter. The group issued this statement:

The Austrian Airlines Group continued to make progress in its restructuring program, as shown by its financial performance indicators, in spite of a difficult first quarter related to the winter season. In spite of massive cost burdens to the amount of EUR seven million related to the airline ticket tax and fuel price increases, the country’s largest domestic airline succeeded in improving its operating result by EUR 11 million, or 16.4 percent from the prior-year quarter. Accordingly, Austrian Airlines posted an operating loss of minus EUR 56 million in the first quarter of 2013 (Q1 2012: minus EUR 67 million).

“Austrian Airlines had a tough opponent in the likes of Jack Frost. Winter-related flight cancellations and expensive de-icing unnecessarily burdened our efforts to get back into the black”, says Chief Executive Officer Jaan Albrecht. “We are in a substantially better position than in the previous year, though our performance is slightly below our expectations. Nevertheless, I am optimistic that we will already achieve a turnaround this year”, he adds.

Total operating revenues declined slightly in the first quarter of 2013, down 1.3 percent to EUR 458 million (Q1 2012: EUR 464 million). Operating expenditures also fell by 3.2 percent, from EUR 531 million to EUR 514 million, an indication that the cost reduction measures have begun to take hold. On balance, the airline posted an operating loss of minus EUR 56 million in the first three months of the year. There were no one-off effects in the first quarter.

The number of passengers carried by the Austrian Airlines Group decreased by 2.7 percent to approximately 2.3 million in the period January to March 2013, which can be attributed to the streamlined fleet. As a consequence of optimized fine-tuning, capacity utilization (= passenger load factor) improved by 3.3 percentage points to 74 percent.

The number of people employed by the Austrian Airlines Group totaled 6,265 employees as at the quarterly balance sheet date of March 31, 2013 (December 31, 2012: 6,236 employees). In 2012/13, about 150 people were hired for positions as flight attendants, ground crew and pilots.

Austrian Airlines launched a comprehensive restructuring program at the beginning of 2012 designed to enhance the airline’s competitiveness and profitability. The focal point of the initiative was the successful transfer of flight operations to its subsidiary Tyrolean Airways effective July 1, 2012. This step served to bundle flight operations, which in turn enabled the elimination of redundancies in flight administration. A corresponding program is currently being implemented in 2013. The harmonization of the fleet for European flights was successfully concluded at the end of March. Eleven Boeing 737 aircraft were taken out of flight operations, whereas seven Airbus 320 aircraft were added to the fleet.

In October 2012, Austrian Airlines also launched a product campaign on its long-haul flights. All Boeing 767 and 777 aircrafts will be equipped with new, modern cabins, new Economy Class seats, new horizontal full-flat Business Class seats and a new in-flight entertainment system by September 2013. Five aircraft have already been remodeled. Investments related to the redesigning of the interiors of all the aircraft will amount to more than EUR 90 million. Moreover, as of May 17, 2013, Austrian Airlines has added the Chicago route to its destinations. As a result, the number of flight connections to North America has been increased to 26. The forecast for bookings to Chicago show capacity utilization of over 80 percent.

Copyright Photo: Stephen Tornblom. Boeing 777-2Z9 ER OE-LPC (msn 29313) lands at New York (JFK).

Austrian Airlines: AG Slide Show

Austrian Airlines sets its restructuring platform for 2013, won’t ask Lufthansa for any more money

Austrian Airlines (Vienna) has outlined it restructuring plans which will be fully implemented in 2013 including moving all operational administration to Innsbruck under Tyrolean Airways which operating all Austrian aircraft (except one). 150 administrative jobs will also be eliminated. Struggling Austrian Airlines will not ask its parent Lufthansa for any additional money, after receiving $119 million to upgrade the fleet according to a report by Reuters. The company issued this statement:

Austrian Airlines Group has initiated a further step in the restructuring program announced in spring. This step will eliminate redundancies in its organization. These were identified through the conducting during the second half of 2012 of analyses of the operating procedures employed in the flight operations of Tyrolean Airways, in technical processes and in administrative departments. The result is potential savings somewhat greater than €10 million. 150 administrative positions out of the Group’s 6,320 employees will be cut.

Gaudenz Ambühl, managing director of Tyrolean Airways, states: “This is a highly painful move. However, it is one that our restructuring makes inevitable. This makes it possible for us to realize all of the savings in costs enabled by the operational transition. These measures have been widely expected. They will now eliminate the redundancies found in operations.”

The following measures were resolved upon:

  • Flight control operations are currently managed from two centers. These operations will all be handled by the Vienna hub.
  • The headquarters of all flight administration operations will be set up in Innsbruck. This essentially involves the establishment of a Shared Services Center in the city, to which nine departments will be assigned.
  • The planning of personnel, resources and rotation will be concentrated in Innsbruck.
    Redundant operations will also be eliminated at Austrian Airlines. The “Part M” responsibilities forming part of technical maintenance – with these including the engineering, the planning and the management – will be grouped in Tyrolean. Tyrolean is the holder of the official AOC (Air Operator Certificate). The technical maintenance of the fleets will continue to be undertaken at a variety of stations. Innsbruck will handle the maintenance of the Bombardier Dash 8 aircraft; Vienna, of the Fokker, Airbus, and Boeing airplanes, and Bratislava, the overhauling of the Fokker fleet.

Jaan Albrecht, CEO of Austrian Airlines says: “The difficult conditions prevailing on markets do not leave us any choice. We have to increase our organization’s efficiency and to eliminate redundancies in the entire Group. This especially applies to duplications in our organizations, of which we have been aware for a number of years.”

All measures will be implemented in 2013. The grouping of operations at a set of centers will result in a reduction of up to 150 jobs. These will be in Austrian Airlines’ administrative operations. The Austrian Airlines Group has resolved to set up a social plan for the employees affected. Details of it are still being worked out with the works council.

Copyright Photo: Keith Burton. Boeing 737-8Z9 OE-LNS (msn 34262) departing London (Heathrow) now carries “Operated by Tyrolean” sub-titles.

Austrian Airlines: AG Slide Show

Tyrolean Airways to lease two Airbus A320s from GECAS

GE Capital Aviation Services Limited (GECAS), the commercial aircraft leasing and financing arm of GE, announced it will lease two Airbus A320-200 aircraft to a new customer, Tyrolean Airways (Innsbruck).

Tyrolean Airways is now responsible for operating all Austrian Airlines flights. Austrian Airlines (Vienna) has become virtually a marketing name rather than an operating airline. Only one aircraft for legal reasons has been retained on the Austrian certificate. Otherwise all other Austrian aircraft and personnel have been shifted to lower-cost Tyrolean. Tyrolean is also dropping the Austrian arrow name.

The aircraft are scheduled for delivery in early 2013 and will expand the existing fleet to around 80 aircraft.

Copyright Photo: Rolf Wallner. Austrian Airbus A320-214 OE-LBO (msn 776) taxies at Zurich.

Austrian Airlines Slide Show: 

Austrian Airlines moves ahead with the phase out of its seven Boeing 737-800s

Austrian Airlines (Vienna) is planning to acquire seven additional Airbus A320s in order to replace its remaining Boeing 737s by the summer of 2013. Austrian currently operates seven Boeing 737-800s.

Read the full story from Fox Business: CLICK HERE

Copyright Photo: Tony Storck.

Austrian Airlines: 

Austrian Airlines moves all aircraft (except one) to Tyrolean Airways, Austrian Arrows name being retired

Austrian Airlines (Vienna) as of midnight July 1, 2012 moved all flight operations to lower-cost subsidiary Tyrolean Airways (Innsbruck), including all of the long-range flights. One former Lauda Air Boeing 777-2Z9 (OE-LPB) was kept on the Austrian certificate to maintain its official “airline” status.

The company issued this statement:

“As of July 1, 2012, there will be joint flight operations under the unified Austrian brand name.

The objective: achieving competitive framework conditions enabling profitable operations

All of the flight operations of the Austrian Airlines Group, which has a fleet of some 80 aircraft, are now bundled at its 100% subsidiary Tyrolean Airways. As of July 1, 2012 Tyrolean is also operating the long-distance fleet.

For customers, the so-called “operational transition” will not result in any essential changes. The “Austrian” brand will remain on all aircraft. The flight numbers will also bear the “OS” airline code, as was the case in the past. However, travel agencies and tickets will provide notification on the identity of the operator of the aircraft undertaking all medium and long-distance flights based on the supplementary annotations “VO” or “operated by Tyrolean”. The supplementary brand “arrows” found on Tyrolean Airway aircraft will successively be removed by the end of 2012.

What has happened in detail:

• Aircraft fleet: 22 airplanes of the A320 family, 7 Boeing 737s, 6 Boeing 767s and 3 Boeing 777s changed their operators within the Austrian Airlines Group on midnight of July 1, 2012. One Boeing 777, OE-LPB, will stay with Austrian Airlines. This is due to international traffic laws. The outplacement of the fleet of the seven Boeing 737 medium-range airplanes still on hand and the “in-placement” of the seven Airbus A320s forms part of the harmonization of the fleet of medium-range aircraft which is being continued.

• Organization: The organization of the entire flight operations is to be bundled in Tyrolean Airways. Austrian Airlines retains such key responsibilities as station management, the technical department, sales in Austria and abroad, as well as such management departments as network planning, personnel, finances and marketing. There will be no changes in ownership. “Tyrolean Airways Tiroler Luftfahrt GmbH” remains a 100% subsidiary of Austrian Airlines AG.

• Austrian Airlines retains its operation authorization, and remains the user of traffic rights. The flights will be performed under the OS flight numbers. However, they will be “operated by Tyrolean”. Austrian Airlines serves some 50 countries from Vienna. No further permits or licenses need to be secured in a large number of countries. This is due to the fact, amongst other reasons, because prevailing legal regulations, especially in the European Union, generally permit this. For countries outside Europe, the requisite approvals have been secured.

• Personnel: some 460 pilots and 1,500 flight attendants are changing their employer within the Group. They will be transferred from Austrian Airlines to Tyrolean Airways. 110 pilots and 214 flight attendants have, in the final analysis, left the company. As a whole, Austrian has 900 pilots and 2,000 flight attendants, including the Tyrolean employees.  The employees will not experience any changes in working environments and remuneration. Tyrolean currently has a work force of about 1,500 employees, which will increase to 3,500 employees as a consequence of the operational transition. The Austrian Airlines Group employs approximately 6,700 people.

• Flight plan: to compensate for the departure of the pilots, a series of temporary measures were implemented for the summer flight plan:

• Retraining: The removal of 4 Boeing 737 airplanes from the fleet leaves 31 Boeing 737 pilots available. They have already been trained to fly Airbus A320 airplanes. The cessation of part-time work at Tyrolean has freed 36 Tyrolean co-pilots for other duties. These pilots, who were trained to fly Fokkers, have already been retrained to handle Airbus aircraft.

• Leasing of airplanes: Austrian Airlines will temporarily lease five airplanes from Lufthansa, Augsburg Airways, Contact Air und Welcome Air (wet leases). Lufthansa will provide a 139-seat Boeing 737-300 to fly the OS routes between Vienna and Düsseldorf and between Vienna and Rome in July and August. Lufthansa will assume responsibility for Vienna-Dubai-Vienna in July by flying a 241-seat Airbus 340-300. In a further move, the Salzburg-Frankfurt route, which has been served by Austrian acting under a commission from Lufthansa, will be operated by Lufthansa itself using a Boeing 737-300 for the first two weeks in July. Contact Air will fly a Fokker 100 seating 100 passengers to two of the four daily OS routes between Vienna-Zurich-Vienna and Vienna-Varna-Vienna. This aircraft would have originally been flown as a “wet lease” under a commission of Austrian’s associate SWISS. Augsburg Airways, which is part of the Lufthansa Group, will temporarily assume responsibility for one of the four flights serving the route between Vienna-Munich-Vienna and for two of the total of three flights on the Vienna-Stockholm-Vienna route during the period July 15 – August 31. 2012. Welcome Air will use a further a 31-seat Dornier 328 to carry out flights between Vienna and Klagenfurt, Salzburg and Prague, in addition to the existing four of the five flights between Linz und Vienna. Passengers will receive Austrian’s on-board services. Austrian will make use of the longer on-ground times by having Austrian Technik conduct maintenance work.

• Freelancers: Some of those pilots that have made use of the privileged termination of employment will be provided with work on a temporary and case-by-case basis.

The reorganization is based on the operational transition is a key component of the EUR 220 million restructuring program presented in January 2012. The objective of the program is the modernization of the structures of Austrian Airlines, so as to bring and sustainably keep Austria’s largest domestic airline in the profit zone.”

Bottom line: Austrian Airlines (under orders from parent Lufthansa) needed to reduce its cost structure and this dramatic move will probably accomplish this goal.

Top Copyright Photo: Michael B. Ing. Sister-ship Boeing 777-2Z9 ER OE-LPC (msn 29313) is now being operated for Austrian Airlines by Tyrolean Airways.

Austrian Airlines: 

Austrian Arrows-Tyrolean Airways: 

Lauda Air: 

Bottom Copyright Photo: Gerd Beilfuss. Boeing 777-2Z9 OE-LPB (msn 28699) when it was with Lauda Air.

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.

Austrian Slide Show: CLICK HERE

Austrian Airlines to decide to shift operations to lower cost Tyrolean Airways on April 19

Austrian Airlines (Vienna) will decide on April 19 at its board meeting whether it will transfer all mainline operations to the lower cost Tyrolean Airways (Austrian Arrows) (Innsbruck) subsidiary according to this report by Airliners.de. The flag carrier is currently at odds with its higher cost pilots who do not want to fly at the same rates as the Tyrolean pilots. Parent Lufthansa is pushing Austrian to take drastic actions to reduce costs or it will consider selling its shares in the airline. Austrian is also considering a new name for Tyrolean Airways.

Read the full report (in German): CLICK HERE

Top Copyright Photo: TMK Photography. Long gone, this special “Wiener (Vienna) Philharmoniker” livery taxies past the camera at Toronto.

Austrian Slide Show: CLICK HERE

Austrian Arrows-Tyrolean Slide Show: CLICK HERE

Bottom Copyright Photo: Paul Bannwarth. Tyrolean Airways operates under the Austrian brand as Austrian Arrows.