AUA Expected to Record High Losses Again

Published: April 12, 2012; 22:18 · (Vindobona)

This year, Lufthansa-owned Austrian Airlines is anticipated not to reach the profit zone. In the first quarter, fees and fuel caused higher costs of € 28m.

AUA Expected to Record High Losses Again / Picture: © Austrian Airlines

AUA does not come out the loss area. Even in 2012, the turnaround will not be reached. Due to higher fuel prices, taxes and fees, AUA faced additional costs of € 28m in the first quarter. Also higher passenger number cannot offset this development. As a result, external effects are eating up substantial parts of the austerity package.

For market observers it is clear that the holding company Lufthansa already expected losses in 2012. In 2011, AUA recorded losses of € 64.7m, operating losses totaled about € 60m.

In March, Lufthansa granted € 140m to Austrian Airlines. Christoph Franz, Lufthansa´s CEO, explained that the decision by the supervisory board requires the implementation of successful restructuring measures.

AUA explained that most effects of the austerity package will be visible in the second quarter. The airline re-negotiated landing fees with Vienna International Airport and other contracts with its suppliers. Also public fees will be cut.

The biggest part of the austerity package, the reduction of personnel costs is not resolved yet, though. For weeks, AUA´s management faces conflicts with the works council. Currently, the transfer of undertakings to the subsidiary Tyrolean is prepared in order to get access to cheaper collective agreements. The brand of AUA will remain, however. The crucial supervisory board meeting will take place on April 19. Nevertheless, a part of AUA´s pilots announced to leave AUA in case of the transfer to Tyrolean. AUA would then have to pay high severance payments.