FW stops hiring

The new chairmen of Flughafen Wien AG (FW) have presented a strict cost-cutting programme.

Julian Jäger and Günther Ofner, who took over at the company which manages Vienna International Airport (VIA or VIE) on 1 September, announced yesterday (Tues) they would not hire any additional staff in the coming years. FW currently employs 4,200 men and women. The firm’s new leadership explained employees who retired would not be replaced. Sackings were identified as “last resort” in their first press conference since taking over from interim FW boss Christoph Herbst who previously headed FW’s supervisory board.

The new FW board also pledged to reduce material expenses by 20 per cent by 2015. FW envisages investing around 650 million Euros in its facilities at the same time. Nevertheless, Jäger and Ofner ruled out a capital increase. FW is listed on the Vienna Stock Exchange (WBAG). One Prime Market share was worth 32 Euros at 11am today.

According to some business newspapers and magazines, former FW chiefs made hardly any economic decisions before asking the political elite of Vienna and Lower Austria for their approval. The city government of Vienna and the provincial parliament of Lower Austria are FW’s main stakeholders. Both political bodies have a 20 per cent interest in the firm which achieved a turnover of 280.3 million Euros in the first six months of this year.

Jäger and Ofner promised yesterday to block all attempts of politically interference. Jäger, who previously headed Malta International Airport (MLA), is seen as close to the Social Democrats (SPÖ) of Chancellor Werner Faymann while Ofner – a former Burgenland Holding AG manager – is alleged to have strong ties with the People’s Party (ÖVP). The conservative party is headed by Foreign Minister and Vice Chancellor Michael Spindelegger, a close ally of Lower Austria’s ÖVP Governor Erwin Pröll.

The new FW bosses also revealed their incomes yesterday. They said their annual salaries were 250,000 Euros each. Bonuses could help them to double these amounts. The decision to disclose their wages is seen as an attempt to disassociate themselves from their successors Herbert Kaufmann, Ernest Gabmann and Gerhard Schmid. The ex-FW executive board members are held responsible for soaring costs of the construction of a new terminal called Skylink by Austrian media. Daily Die Presse writes today Jäger and Ofner “do what their successors – who were removed from office early – should have done a long time ago: they economise”.

“We are evaluating the spending of every Eurocent,” the new FW chiefs are quoted as saying. Jäger and Ofner denied offering their opinion on the airport’s cost-cutting potential but referred to a recent statement by supervisory committee head Erwin Hameseder who spoke of 20 per cent. Jäger and Ofner said the upcoming cuts would not affect an investment initiative considering VIA’s gastronomy facilities. They stressed the aerodrome’s terminals would be renovated and modernised in the coming months before Skylink’s envisaged opening next June.

“We have to catch up considering the airport’s service – from its gastronomic offers to the toilets,” they said. Jäger and Ofner also vowed costs of the building of Skylink would not surpass 800 million Euros. Their predecessors spoke of 830 million Euros while papers and magazines claimed overall expenses would range around one billion Euros if all outsourced costs were considered.

The construction started in 2002. Back then, managers and planners spoke of expenses of 400 million Euros. Building site activities came to a halt several times after investigative magazines like profil and Format reported about immense overruns of costs and illicit occurrences. The Federal Audit Office (FH) checked the claims whereas state prosecutors’ investigations are ongoing. According to reports, some businesspeople formerly assigned to the project charged FW for work which had never been done.

Skylink will be VIA’s fourth terminal. It was set to open ahead of Euro2008. The project has been criticised since it will not change anything about the current satiation at VIA as far as the Airbus A380 no-go is regarded. The plane – which provides seating for 525 people in a typical three-class configuration and for 853 passengers in all-economy class settings – is too large to touch down at VIA. This issue could throw Austria’s biggest and busiest aerodrome back further in its battle against other airports in southern Germany, Switzerland and Hungary over which location is the most important hub in Central Europe (CEE).

The new FW board’s promise to improve FW’s facilities to increase customers’ satisfaction comes after managers of Austrian Airlines (AUA) managers expressed criticism about the state the arrival area and other parts of the airport were in. The airline bosses claimed many travellers were appalled by VIA’s appearance. AUA is FW’s most important business partner since more than one in two departures and take-offs are services of AUA and its affiliates.

Some analysts have warned the increasing pressure of Lufthansa bosses on AUA chiefs to finally become profitable could harm FW’s performance as the Viennese carrier is expected to implement further austerity measures. Lufthansa bagged a major stake in AUA in 2009. The deal may have saved AUA from bankruptcy.

AUA officials have called on FW to reduce the fees it charges airlines as the airport’s service quality allegedly fails to match standards reached elsewhere in CEE. FW is understood not to implement a rise of charges aviation firms must hand over when operating at the aerodrome.

Around 80 airlines are currently doing business at the airport which is situated south-east of Vienna. Swiss carrier SkyWork Airlines (SkyWork) became the latest to do so earlier this month. The airline, which was established in 1983 – now operates between VIA and Bern-Belp Airport (BRN) in Switzerland.

Almost 2.08 million passengers were registered at VIA last month, 4.3 per cent more than in August 2010. Especially the number of people on planes to destinations in Eastern Europe (EE) soared (plus 14.7 per cent).