Austrian Airlines (AUA) chief Jaan Albrecht has asked the airline’s business partners and lawmakers in Austria for help in combating the crisis.
Albrecht said yesterday (Tues) he was determined to fly back into the black this year but also made clear that aviation security authorities, Vienna International Airport (VIA or VIE) and other institutions had to consider lowering their charges. “The aviation industry is going through changes. AUA must evolve too,” the former Star Alliance boss said, adding that the Viennese carrier could not achieve a profit without help from its partners.
Albrecht, who joined Andreas Bierwirth and Peter Malanik at the airline’s board in November, said he considered carrying out changes affecting staff contracts. The entrepreneur explained that AUA’s personnel costs were as high as in 2009 at the moment despite a workforce level decline of 1,500. Reports have it that employees’ incomes would not be upped anymore if the inflation rate were to rise. Pilots could be asked to work longer without being paid more.
Works council chiefs and unionists have already warned that they would not accept further cutbacks. They pointed out today that many employees’ incomes had been drastically reduced in the latest crisis already, adding that affected staff “had nothing more to give”. A spokesman for the employees’ representation claimed restoring a firm’s finances by slashing staff wages “is an endeavour certain to fail”.
Albrecht argued that AUA had to fork out 27 per cent of its earnings in taxes and charges year after year. The ex-Star Alliance chief claimed airlines in other countries were facing a lesser fee burden. He appealed on Flughafen Wien AG (FW), the company which manages VIA, to reduce its fees to help AUA in its current austerity procedure. Albrecht also hinted that he intended to approach the Austrian government coalition of Social Democrats (SPÖ) and the People’s Party (ÖVP) for financial support.
Albrecht said his plan was to raise earnings by lowering costs but also by achieving higher earnings. This statement appears to be a warning that ticket prices could soon be increased. AUA introduced a price hike of three Euros on short-distance flights only last month. At the same time, a ticket for a long-distance connection service soared by 10 Euros. The airline, which was acquired by German carrier Lufthansa in 2009, said it had to compensate rising kerosene prices.
AUA has 5,800 full-time employees. The airline suffered operative losses of almost 65 million Euros each in the past two years. AUA counted 10.5 million passengers between January and November 2011. This was an increase of 2.9 per cent compared to the first 11 months of 2010.
AUA officials recently explained that the carrier intended to work on remaining one of the most popular aviation firms for connections to airports in Eastern European (EE) countries. However, Albrecht signalised yesterday that AUA may stop operating between VIA and some destinations of little popularity in the EE region in favour of more long-haul services.
Meanwhile, one of AUA’s key rivals announced an all-time passenger record. Air Berlin boss Hartmut Mehdorn said yesterday his airline registered 35.5 million passengers last year, 1.2 per cent more than it had done in 2010. These figures surprised aviation business experts since the debt-stricken firm is forced to economise. The number of flights operated by Air Berlin – which owns FlyNiki, an airline founded by Austrian businessman Niki Lauda – edged down by 1.1 per cent from 2010 to 2011.