Further Cost Savings for Austrian Airlines

Because of the current situation in international aviation and the dramatic falls in demand suffered by the industry due to the crisis in Iraq, it has proven necessary to make a lasting cost reduction of 5 % across the Austrian Airlines Group for the full year 2003. This figure is equivalent to a saving of around EUR 40 million. Overall production was reduced by 11 % in April, while approximately 10 % of scheduled flights will be removed from the programme in May. This temporary adjustment in production will make possible an additional 10 % reduction in costs, producing further savings of EUR 20 million. While these measures are being implemented, four aircraft will be grounded until further notice.

Although short-time working models are not currently being applied, a lasting conflict in Iraq may ultimately make it impossible to exclude such solutions. Measures of this type will require open and transparent dialogue with the Works Councils, which are being included in the entire process from the start in an effort to achieve an atmosphere of constructive cooperation. As a further consequence of the Iraq crisis and the resultant collapse in demand, a reduction of around 150 positions is being registered with the Austrian agency concerned with the job market.