Austrian Airlines says it will cut between 700-800 jobs as it prepares to record significant losses for this year and 2020. The Vienna-based airline said it is being forced to “realign its operations” in the face of stiff competition from a “glut of low-cost airlines” that have entered the market at its hub.
“We have to reposition ourselves in order to survive the brutal competition of the low-cost airlines,” explained the airline’s chief executive Alexis von Hoensbroech.
Describing the measures as “painful”, Hoensbroech said a slew of new cost-cutting measures were necessary in order to secure the very future of the airline.
“We will not retreat a single multimeter on the Viennese market,” he continued in response to rivals muscling in on the market.
Austrian is facing the threat of a resurgent Laudamotion, which is being funded by Europe’s largest low-cost carrier Ryanair. The short-haul operation of IAG budget carrier LEVEL has also based itself in Vienna – a move that IAG chief exec Willie Walsh described as “opportunistic”.
Hoensbroech’s comments echo that of Lufthansa Group CEO Carsten Spohr who has said the airline group, of which Austrian is part of, won’t give in to Ryanair as it attempts to muscle its way into the German short-haul market.
Austrian hopes to trim costs by €90 million per year by 2021 through what it describes as “efficiency and productivity” improvements. The airline hopes that the majority of the job losses will be accounted for through natural wastage.
Flights between Austria and Germany will gradually be taken over by Lufthansa, while Austrian slowly stations every available aircraft in Vienna. The airline plans on using larger aircraft on as many routes as possible in an attempt to carry more passengers with less crew.
Austrian has blamed the low-cost carriers for bringing in staff on considerably lower wages and committing “social fouls” but also plans to bring in Eurowings on a wet-lease agreement – crew at Eurowings are paid significantly less than Austrian’s own employees.
It’s Vienna to Miami route has been axed because it was not profitable and flights to Los Angeles will also be cut back. Austrian still hasn’t decided what it will do with the extra capacity it has freed up.
“Our long-term strategy remains in full force,” concluded Hoensbroech. “We want to modernise Austrian Airlines and make it profitable and investment ready.”
