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AUA conflict continues as Feitl attacks IAG

The future of Austrian Airlines (AUA) remains uncertain as negotiations between the firm’s board, Lufthansa managers and works council chiefs have been postponed.

AUA boss Jaan Albrecht announced yesterday (Tues) that negotiators decided to continue discussing the various planned reforms until the end of this month. Reports have it that the Austrian Trade Union (ÖGB) convinced AUA chiefs of agreeing to a continuation of the talks.

Albrecht wants to freeze pilots’ wages if they refuse to sign new contracts which would confront them with pay cuts of up to 25 per cent. Around half of AUA’s 600 pilots work under contracts which ensure them a per capita compensation of up to half a million Euros if they leave the carrier following a labour dispute. Pilots hired from 2005 would not benefit to such an extent.

AUA decision-makers are well aware that the debt-stricken carrier could collapse if most of the pilots quit to join a rival at the same time. Works council officials rejected Albrecht’s reform suggestions yesterday but announced after meeting AUA and Lufthansa bosses that they wanted to continue the negotiations.

AUA supervisory board head Stefan Lauer - who is part of the executive board of Lufthansa, the German carrier which snatched up AUA in 2009 – warned yesterday that AUA was underfunded. He hinted that Lufthansa would only carry out another capital injection if pilots accepted salary cutbacks. Asked to comment on rumours that many pilots were ready to leave AUA, Lauer said this was everyone’s personal decision. He claimed that a considerable number of pilots applied for a job at AUA after the planned restructuring in the past weeks.

Albrecht was ordered by Lufthansa to save more than 200 million Euros within this year to drag AUA back in the black after years of high losses. Almost 50 million Euros should be saved by slashing personnel costs, according to Albrecht’s concept. While AUA’s pilots hope for a less dramatic austerity package, other groups of staff have already accepted further wage cuts. Reports also have it that Flughafen Wien AG (FW), which manages Vienna International Airport (VIA or VIE) is ready to reduce charges for AUA.

Meanwhile, the former CEO of Tyrolean Airways (Austrian Arrows) has warned AUA’s pilots from going on strike. Speaking to the Salzburger Nachrichten, Fritz Feitl said that an intensified labour conflict might only help bosses to reorganise the struggling airline’s structure. Feitl, who headed Tyrolean Airways between 1982 and 2000, said it seemed to him that top-tier managers were now finally speaking out the truth concerning AUA’s condition following years of poor decision-making.

Tyrolean Airways is part of the AUA Group. The carrier, which was founded in 1978, operates at six airports in Austria and more than 70 destinations across the continent. It is currently headed by Christian Fitz. Tyrolean Airways is widely seen as a role model firm for achieving more than AUA while keeping expenses and workforce levels low.

Feitl said it seems to him that Albrecht knows very well what he is doing. "Things seem to finally be on track (at AUA)," the ex-Tyrolean Airways boss told the Salzburger Nachrichten newspaper. He claimed that at the root of AUA’s problem were procedures in the past when former CEOs never faced any kind of consequences from Austrian Industry-Holding Stock Corporation ÖIAG for making losses year after year. He claimed that the former AUA stakeholder and its ex-head, Peter Michaelis, were mainly to blame for AUA’s dismal condition.

Austrian Times



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