Austrian announces 1,000 job cuts, still confident on Lufthansa takeover
July 3, 2009: Austrian Airlines Group said yesterday that it will need to cut an additional €200 million ($281.6 million) in costs and will slash 1,000 jobs to help it achieve the savings target.
"It is no easy step," Executive Board member Andreas Bierwirth said. "We see the market dropping more than we expected. It is the biggest crisis in aviation and the crisis will be increasing." Talks with unions are underway to find a solution to reach the workforce reduction. "The company needs more [cost] structure improvement, [increased] productivity and we have to get to lower labor costs to reach a level like SN Brussels or Swiss," Bierwirth told this website during a conference call.
He added that the liquidity of the company is secured at least until the end of this year. Subsidiary Lauda Air is being evaluated to determine if it should continue being operated under its own brand.
Regarding the European Commission´s decision to extend the deadline of its investigation into the proposed takeover of AAG by Lufthansa (ATWOnline, July 2), Executive Board member Peter Malanik said, "We have indications that [the extended investigation] will be shorter than 90 days. We have answered already more than 400 questions from the EU. We are getting very close [to closing the deal]." He added that AAG hopes the transaction can be completed by July 31.
"If we were not confident that the closing [of the takeover] is realistic, then we [would have] had to announce a much tougher scenario to stay independent" than the cuts revealed yesterday, Malanik added. AAG employs more than 7,900. Some 2,600 already are working on a reduced schedule.