AUA works committee accepts cutbacks

The works council of Austrian Airlines (AUA) has given the all-clear to planned wage cuts.

Works committee leaders informed the airline’s 1,500 pilots, stewards and stewardesses yesterday evening (Tues) that they decided to say yes to the salary reform. AUA bosses planned to force the carrier’s pilots to work under contracts similar to those of affiliate Tyrolean Airways if the works council refused to change its opinion. Tyrolean Airways pilots’ incomes are 25 per cent lower than the wages of their colleagues at AUA.

The Viennese aviation firm’s works council announced last night they supported the AUA executive board’s plans after all. Jaan Albrecht, who heads AUA since November, wants to cut pilots’ pensions. He also intends to get rid of regulations which help the 600 pilots to automatic wage hikes every other year. Albrecht and his team of negotiators recently rejected unionists’ suggestions. Their plans featured too few substantial cutbacks, according to reports.

Albrecht is under pressure by the AUA supervisory board and bosses of Lufthansa – which acquired a majority stake in AUA in 2009 – to get the austerity measures underway as soon as possible. One of the most disputed detail aspects of the agreement between the board and the board personnel’s representatives means that pilots might also miss out on modest salary increases which would have compensated the Austrian inflation.

Most of AUA’s pilots and cabin crew members are expected to agree to working under the new contract. However, some of them are already getting ready to leave the firm and join a rival which pays more. AUA’s works council and the company’s bosses told employees in an e-mail yesterday evening that the last-minute settlement “is a realistic chance to avoid a disaster for all of us and our AUA”.

AUA was established in 1957. The airline’s performance worsened in the past years when more and more low-cost carriers entered the market. It is still strong in providing connections to destinations in the Eastern European (EE) region, but some unprofitable services to destinations in Asia could soon be removed from the flight plan.

Lufthansa has similar intentions. The German carrier – which suffered a net loss of 13 million Euros in 2011 – is reportedly ready to postpone the acquisition of new planes while experts describe AUA’s fleet as out of date and too costly. Another controversial issue is AUA’s allegedly inefficient administration.

AUA and Germanwings are the Lufthansa Group’s problem children while Swiss, another subsidiary company of the aviation giant, prospers. Lufthansa and its affiliates counted nearly seven million passengers in January, up by 3.9 per cent compared to the first month of 2011. AUA had 11.26 million passengers last year, 3.4 per cent more than in 2010. Air Berlin, one of the Lufthansa Group’s key competitors, recorded around 35 million passengers last year.