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Austrian Airlines 'on track' with restructuring, expects to report first profit since 2007 in 2013

1-Nov-2013 4:07 PM

Austrian Airlines CEO Jaan Albrecht stated (31-Oct-2013) the carrier "is well on track", adding that the "restructuring phase will be followed by the planned development of the intercontinental business.” The carrier noted that synergies from the merger of the engineering and flight operations administration as well as the expansion of long-haul routes should deliver an additional EUR40 million improvement in gross profit in years two and three. The expansion phase also includes the appointment of around 230 new flight attendants with the operation of an additional long-haul aircraft starting in summer 2014. Recruitment of the staff has already commenced. In contrast, further savings are being made in the area of administration; the merger of the engineering and flight operations administration of Tyrolean Airways and Austrian Airlines should be completed in 2014 and result in a reduction of up to 150 positions. The merger of flight operations and administration has seen the removal of four areas, including the duplicated areas of Cabin, Cockpit, Flight Ops Administration and Head Office Administration at Tyrolean and Austrian. The merger also includes combining the air traffic control centres at the two locations in Innsbruck and Vienna at the hub in Vienna. In the area of technical maintenance, the “Part M” or support functions, such as engineering, planning and control, will be combined in Vienna. Technical maintenance of the fleets will continue to be performed at different locations. The maintenance of the Bombardier Dash 8 aircraft will be performed in Innsbruck, the Airbus and Boeing aircraft will be maintained in Vienna, and Bratislava is the location for the overhaul of the Fokker fleet. Mr Albrecht commented: “Unfortunately, we don’t have any choice. We must make our organisation more efficient and remove duplications across the Group - above all the organisational duplications that have existed for years.”  On the outlook, Mr Albrech said: “We want to end the year with an operating profit in the double-digit millions on the balance sheet, in the black, of course". The last time Austrian Airlines was in the black was in 2007.