AUA staff cuts: Appeals and criticism for austerity package

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On Thursday, the airline had announced by the end of 2021 savings of 90 million euros a year. Every tenth of the approximately 7,000 jobs is canceled. The possible "maximum" of the job cuts should be made through the natural fluctuation, it said in a press conference. One calculates here annually with 200 to 250 places. To be implemented by 2021, affected the entire company including the ground and the flight crew.

The union vida stated that competitive pressure should not be a license to reduce staff. The austerity measures are considered excessive and refers to the profits of the parent company. "The Lufthansa Group is one of the most profitable companies in Europe with currently 2.5 billion euros in profits per year. The shareholders get more money and the employees of the subsidiary AUA have to bleed for it, "said Daniel Liebhart, chairman of the aviation department in the union vida.

Informed employees about savings plans

The union GPA-djp announced to fight for every job. "As part of the announced staff cuts, there must be socially acceptable solutions," said the Federal Managing Director Karl Durtscher. The parent company Lufthansa was required not to abandon the AUA here. "A mere reduction in workforce leads to work crowding and overloading and can not be in anyone's sense," Durtscher said.

Also the chairman of the works council of the ground staff with the AUA, Alfred Junghans, spoke Friday early in the O1 interview of a "deviant price fight". A fight against the austerity package is apparently not planned. "Together with our social partner we will fight for every job," says Durtscher – Audio in oe1.ORF.at.

AUA boss Alexis von Hoensbroech, CCO Andreas Otto and CFO Wolfgang Jani

APA / Helmut Fohringer

AUA boss Alexis von Hoensbroech and the board members Andreas Otto and Wolfgang Jani

The company did not want to commit itself to numbers for dismissals. Talks with the works council are due to start in the near future. At the AUA, employees were informed about the austerity program before and after the press conference. Currently, the company has 7,038 employees, compared to 7,104 a year ago.

AUA boss complains about price war

The 90-million-euro austerity package includes a bundle of 300 measures, said CFO Wolfgang Jani. The company wanted to reduce not only the workforce reduction but also the material costs. Among other things, the number of propeller machines and thus the staff costs will be reduced. The automation should also be expanded. However, they did not want to be forced back into the "low-cost corner" and also announced new routes and investments in the fleet.

The reason given by AUA boss Alexis von Hoensbroech was first and foremost the high capacity of budget airlines in Vienna and the enormous price war. The AUA sees 35 planes from low-cost carriers such as Laudamotion, Wizz Air, easyJet and Level next year, this year it was 24. In Vienna, there are now no more 4.5, but seven million low-cost seats on the market.

AUA press conference on savings plans

On Thursday, the AUA presented its savings plans for the next two years. Up to 800 jobs will be canceled. The reason for the package is the competitive pressure.

"We have to reposition ourselves to survive in the brutal competition against low-cost airlines. The measures are sometimes painful, because they take us substance, which we have laboriously built up in recent years. "One must adjust to the price war on a permanent basis – the environment will continue to be characterized by price competition.

"We do not go back a millimeter"

"The Austrian solution has turned out to be a green sham," Hoensbroech said in reference to the resale of the successor Niki Laudamotion to Ryanair. The cutthroat competition puts the AUA network under pressure, the manager warned. The attack on the European network endangered the long-haul feeder business. The question of whether Vienna would be a low-cost airport or a long-haul turnstile would also be relevant to Austria as a business location, which is why they wanted to talk to the airport and politics here.

AUA sales director Andreas Otto said that there is no choice but to go down at the ticket prices – "otherwise the seat will remain empty". The alternative would be to give it up, but then someone will follow immediately. In particular, the attack by Ryanair CEO Michael O'Leary to increase the fleet in Vienna to 19 airplanes in 2020, provides for Otto shaking his head: "What is organized in Vienna, is really crazy." Within the Lufthansa Group have been decided: " We do not go back a millimeter. "

"Mr. O'Leary is wrong"

"There are routes, there are tickets at 19 euros in the market," said an industry insiders to the APA. "Nobody can tell me that someone is currently making a profit in Vienna," the insider continues. Even Wizz-Air boss Jozsef Varadi spoke in June of a ruinous market situation: "The bankruptcies have led to a huge overcapacity, the prices fell into the basement and caused a bloodbath."

Ryanair boss O'Leary made clear recently that Lauda should overtake the AUA in his opinion in five years. The Irish budget airline in Vienna is currently also accepting higher losses than originally planned. "Mr O'Leary is wrong to believe that Lauda can overtake the AUA in five years," Hoensbroech's AUA chief countered on Thursday.

"Dramatic" profit slump

Previously, the high kerosene prices were also cited as the reason for the poor performance of the AUA. Jani had reported in the morning that adjusted operating profit had dropped "dramatically" by 85 percent after nine months from € 110 million to € 17 million. In the summer months, the third quarter, the result was 70 million euros, 33 percent down on the same period of the previous year. "The cheap aviation glut and the increased kerosene costs on the ticket prices and thus on our result," said Jani.

Graphic shows results and employees of the AUA

Graphics: APA / ORF.at; Source: AUA

According to figures reported by the AUA, revenues in the first three quarters dropped by two percent to € 1.966 billion, while costs rose by four percent to € 1.679 billion. The kerosene calculation alone is reported to have been 47 million euros higher this year, an increase of 14 percent.

Lufthansa: restriction on Vienna demanded

The AUA parent Lufthansa explained that companies with low profit or loss need to improve their performance. In the future, the AUA should restrict itself to flights from the Austrian capital and close all bases outside. The fleet is to be harmonized by decommissioning Bombardier machines.

Stefan Hartl (ORF) about the austerity measures of the AUA

ORF reporter Stefan Hartl reports from Vienna Airport on the austerity measures planned by the AUA.

Even Brussels Airlines and the freight program threaten savings, said CFO Ulrik Svensson. Group-wide, earnings before interest and taxes (EBIT), adjusted for special effects, fell by eight percent year-on-year to just under EUR 1.3 billion, despite a slight increase in sales between July and September. Lufthansa also said that higher fuel costs and the price war in Europe had weighed on the company. For the full year, the Group expects earnings of between EUR 2.0 and 2.4 billion.



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