Austrian Airlines concludes transfer of flight operations into Tyrolean

Austrian Airlines Supervisory Board concluded (19-Apr-2012) the planned transfer of the company's flight operations into its subsidiary, Tyrolean Airways. For legal reasons, the earliest possible date this operation transfer can take place is 01-Jul-2012. With this decision the EUR220 million restructuring programme has been formally sealed, with the aim to bring the carrier back into profit. The company said the transfer of air crew contracts to Tyrolean Airways will help save EUR45 million p/a in annual fuel costs, according to chairman and CEO Jann Albrecht, as quoted by dpa-AFX. COO Peter Malanik said the carrier is unconcerned about future legal challenges from its unions. Details include:

• Impact on flight operations: Austrian Airlines will remain Austrian Airlines with a fleet of 77 aircraft serving 130 destinations internationally. For the 600 pilots and 1500 flight attendants of Austrian Airlines, "nothing will change in terms of the workplace or actual salary". Savings will instead be achieved through limited future salary increases;
• Integration: The next step is to integrate the Austrian flight operations into Tyrolean. In Mar-2012, a project organisation was with the aim to organise 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;
• Overview of the work programme:
  • Staff: Austrian Airlines noted that in the work package 'Modernisation 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, although no agreement has been reached. "Therefore the transfer of flight operations into the subsidiary Tyrolean will now be realised. With the cost level of Tyrolean Airways, Austrian Airlines has a forward-looking and competitive basis for growth," the company said;
  • Route network: A new flight schedule with a strategic orientation to its domestic market of Austria and strong eastern markets has been developed;
  • Fleet: The removal from the fleet of 11 Boeing 737s and the acquisition of seven A320s is underway as part of fleet harmonisation efforts. The retraining of pilots began in Mar-2012. The retraining pool includes pilots of the 737 and copilots of the Fokker fleet;
  • Location: An agreement has been signed with Vienna Airport to secure the common future of the two organisations, 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. In the field of handling, savings potentials have been identified, and the framework conditions for a long-term agreement have been defined;
  • Costs and revenues: The carrier has entered agreements with business partners and suppliers, adding, "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". [more - original PR]
    

Austrian Airlines: "We have taken a decision today, that releases Austrian Airlines from inherited structural burdens. It also gives us a perspective on the future of aviation, because we will be organised in a more competitive way," Jaan Albrecht, CEO. Source: Company statement, 19-Apr-2012.