Austrian Airlines Group sets forth its restructuring process

• Further savings through the elimination of duplicate operations
• Bolstering of operations in Innsbruck: to be home of a center administering all flights at Tyrolean Airways
• Flight control center operations of Tyrolean Airways to be pooled with those at the Vienna hub

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.

As of September 30, 2012, the Austrian Airlines Group employed some 6,320 persons.