UPDATE: Austrian Air To Cut Further EUR200 Million In Costs By '12
July 02 2009 - 1:11PM
Dow Jones News
Austria's flag ship carrier Austrian Airlines AG (AUA.VI)
Thursday said around 1,000 jobs will be cut by mid 2010, as the
carrier plans to save EUR200 million by 2012.
As well as labor agreements, outplacements and not filling
vacant positions, there will also be compulsory redundancies, the
company said.
To reach an earnings before interest and taxes margin of around
6%-7%, earnings have to rise about EUR200 million by 2012, the
company said.
"Reaching these goals is made more difficult by the economic
crisis...but that also shows that a restructuring of the company is
imperative. This is why consistent measures are necessary to
improve Austrian Airlines' cost structure," said Austrian Airlines
board members Andreas Bierwirth and Peter Malanik.
The European Commission Wednesday launched an in-depth
investigation into Lufthansa AG's (LHA.XE) plan to buy Austrian
Airlines. The deal with Lufthansa is key to maintaining Austrian
Airlines' solvency. It has been hit in the past year first by
soaring oil prices and then the global economic crisis.
Lufthansa proposed paying EUR4.49 a share for Austrian Airlines'
outstanding shares. The takeover will also receive help from the
Austrian government in the form of EUR500 million in restructuring
aid, which is being scrutinized by the commission separately.
Company Web site: www.austrian.com
-By Natascha Divac, Dow Jones Newswires; +49 69 29725 500;
djnews.frankfurt@dowjones.com