Please Clarify Pilot Situation @ Austrian Airlines
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Please Clarify Pilot Situation @ Austrian Airlines
Please excuse my ignorance if there is another post about this subject - I have been traveling a lot lately outside of Europe and I missed a lot of this news regarding Austrian. Can someone "boil down" or clarify the situation for me (and my smallish brain 
)? I was aware that Lufthansa was pressuring Austrian to deeply cut costs and that the pilot package was a big bargaining point. I also knew that the former Lauda 737s were being parked.
I found this article below in the news. First Iberia and now Air France and Austrian under assault from the cost cutters (not too surprising considering the aggressive LCCs and the terrible European economy). This seems a bit drastic!
So, are the Austrian mainline pilots becoming Tyrolean pilots? All of the Austrian pilots - including the 777 pilots? Is wage growth stopping? Will the Tyrolean Arrows Q400 pilots get their wages reduced to flight instructor or baggage handler wages now? I assume a strike would be in the works and that both Emirates and Qatar will be holding recruiting sessions shortly in Wien (I would probably leave for the desert myself - but that is just me)...
Thank you for any clarification on the situation at Austrian - and good luck to all involved! See the news story below:
Austrian Airlines’ (Vienna) board of directors has approved a plan to move Austrian’s flight operations to lower cost Tyrolean Airways (Innsbruck). Austrian issued the following statement:
“The Supervisory Board of Austrian Airlines has concluded the planned transfer of the company’s flight operations into its subsidiary, Tyrolean Airways. For legal reasons, the earliest possible date that this operation transfer can take place is July 1, 2012. With this decision the 220 million euro restructuring program has been formally sealed. The aim of the program was to bring the country’s largest domestic airline back into profit.
For customers nothing will change as a result of the transfer of flight operations: Austrian Airlines will remain Austrian Airlines – with a fleet of 77 aircraft serving 130 destinations around the world. For the employees of Austrian Airlines flight operations, who are 600 pilots and 1,500 flight attendants, nothing will change in terms of the workplace or actual salary. This is because, the savings should be achieved by means of level salary increases.
One flight operations for Austrian Airlines and Tyrolean:
The next step is to integrate the Austrian flight operations into Tyrolean. In March, a project organization was started with experts and managers of both companies. The aim of the working groups is to organize joint flight operations without a duplication of efforts by the end of the year. Both locations, Vienna and Innsbruck, are part of the future concept in all cases.
An overview of the work program:
• Staff: In the work package “Modernization of Collective Agreements” an agreement was found with the personnel workers´council of the Ground staff and the GPA (Union for private employees). Part of this are a zero growth wage agreement for 2013 and an agreement about the exit from the current pension fund model. Intensive negotiations with the personnel workers´council were lasting until the very last minute. Unfortunately no agreement has been reached. Therefore the transfer of flight operations into the subsidiary Tyrolean will now be realized. With the cost level of Tyrolean Airways, Austrian Airlines has a forward-looking and competitive basis for growth.
• Route network and fleet harmonization: A new flight schedule with a strategic orientation to our domestic market of Austria and strong eastern markets has been developed. The removal from the fleet of eleven medium-haul aircraft of the type Boeing 737 and the acquisition of seven Airbus A320 is underway. Essential here is that suitable aircraft types are found that allow us to carry out the necessary technical requirements, such as adjustments to the engine or cabin, as cost-effectively as possible. The retraining of pilots began back in March. This is being flexibly adjusted, depending upon the time of the successive fleet harmonisation. The “retraining pool” includes pilots of the Boeing 737 and copilots of the Fokker fleet.
• Location: An agreement has been signed with Vienna Airport to secure the common future of the two organizations, and to strengthen the development of transfer- and long-haul traffic. Overall, this should serve to expand the Vienna hub and the long-haul product being offered at the location. A good basis for doing this has been created with the new Austrian Star Alliance Terminal, which will go into operation in June 2012. In the field of handling, too, savings potentials have been identified, and the framework conditions for a long-term agreement have been defined.
• Costs and revenues: Many of the business partners and suppliers want to participate in the future concept of Austrian Airlines and support it in adapting the conditions. With an extension of contracts and cheaper conditions with more than 60 suppliers it was possible to save substantial amounts, running into millions. The revenue side includes the expansion of corporate customer business, through cooperations with Lufthansa Group and partners within Star Alliance.”
Copyright Photo: Rolf Wallner. The Boeing 737s will be phased out.
)? I was aware that Lufthansa was pressuring Austrian to deeply cut costs and that the pilot package was a big bargaining point. I also knew that the former Lauda 737s were being parked.I found this article below in the news. First Iberia and now Air France and Austrian under assault from the cost cutters (not too surprising considering the aggressive LCCs and the terrible European economy). This seems a bit drastic!
So, are the Austrian mainline pilots becoming Tyrolean pilots? All of the Austrian pilots - including the 777 pilots? Is wage growth stopping? Will the Tyrolean Arrows Q400 pilots get their wages reduced to flight instructor or baggage handler wages now? I assume a strike would be in the works and that both Emirates and Qatar will be holding recruiting sessions shortly in Wien (I would probably leave for the desert myself - but that is just me)...
Thank you for any clarification on the situation at Austrian - and good luck to all involved! See the news story below:
Austrian Airlines’ (Vienna) board of directors has approved a plan to move Austrian’s flight operations to lower cost Tyrolean Airways (Innsbruck). Austrian issued the following statement:
“The Supervisory Board of Austrian Airlines has concluded the planned transfer of the company’s flight operations into its subsidiary, Tyrolean Airways. For legal reasons, the earliest possible date that this operation transfer can take place is July 1, 2012. With this decision the 220 million euro restructuring program has been formally sealed. The aim of the program was to bring the country’s largest domestic airline back into profit.
For customers nothing will change as a result of the transfer of flight operations: Austrian Airlines will remain Austrian Airlines – with a fleet of 77 aircraft serving 130 destinations around the world. For the employees of Austrian Airlines flight operations, who are 600 pilots and 1,500 flight attendants, nothing will change in terms of the workplace or actual salary. This is because, the savings should be achieved by means of level salary increases.
One flight operations for Austrian Airlines and Tyrolean:
The next step is to integrate the Austrian flight operations into Tyrolean. In March, a project organization was started with experts and managers of both companies. The aim of the working groups is to organize joint flight operations without a duplication of efforts by the end of the year. Both locations, Vienna and Innsbruck, are part of the future concept in all cases.
An overview of the work program:
• Staff: In the work package “Modernization of Collective Agreements” an agreement was found with the personnel workers´council of the Ground staff and the GPA (Union for private employees). Part of this are a zero growth wage agreement for 2013 and an agreement about the exit from the current pension fund model. Intensive negotiations with the personnel workers´council were lasting until the very last minute. Unfortunately no agreement has been reached. Therefore the transfer of flight operations into the subsidiary Tyrolean will now be realized. With the cost level of Tyrolean Airways, Austrian Airlines has a forward-looking and competitive basis for growth.
• Route network and fleet harmonization: A new flight schedule with a strategic orientation to our domestic market of Austria and strong eastern markets has been developed. The removal from the fleet of eleven medium-haul aircraft of the type Boeing 737 and the acquisition of seven Airbus A320 is underway. Essential here is that suitable aircraft types are found that allow us to carry out the necessary technical requirements, such as adjustments to the engine or cabin, as cost-effectively as possible. The retraining of pilots began back in March. This is being flexibly adjusted, depending upon the time of the successive fleet harmonisation. The “retraining pool” includes pilots of the Boeing 737 and copilots of the Fokker fleet.
• Location: An agreement has been signed with Vienna Airport to secure the common future of the two organizations, and to strengthen the development of transfer- and long-haul traffic. Overall, this should serve to expand the Vienna hub and the long-haul product being offered at the location. A good basis for doing this has been created with the new Austrian Star Alliance Terminal, which will go into operation in June 2012. In the field of handling, too, savings potentials have been identified, and the framework conditions for a long-term agreement have been defined.
• Costs and revenues: Many of the business partners and suppliers want to participate in the future concept of Austrian Airlines and support it in adapting the conditions. With an extension of contracts and cheaper conditions with more than 60 suppliers it was possible to save substantial amounts, running into millions. The revenue side includes the expansion of corporate customer business, through cooperations with Lufthansa Group and partners within Star Alliance.”
Copyright Photo: Rolf Wallner. The Boeing 737s will be phased out.
There are very few things clear about this at the moment actually. After several months of failed negotiations, deadlines, final deadlines, extended final deadlines and so on, OS supervisory board has decided to dissolve OS flight operations and merge them into VO flight operations by 1st of July this year - this much is certain.
Now, there is an Austrian law on such proceedings - the Arbeitsvertragsrechtsanpassungsgesetz (lovely German word, is it not?), which translates as Law on the adjustment of work contract legislation and is conveniently abbreviated as AVRAG. In short, it demands that the employees of the dissolved, merged corporation are not to have their T and Cs reduced and have to be treated as if they had been employees of the company taking over from the beginning. Consequently, OS staffs income will be frozen at current values until the figures according to VO contract have caught up in some years and only then be raised. Also, the seniority lists will be joined according to the dates of entry into the respective employees initial contract. For VO original staff, the T and C remains intact.
But there is a large source of uncertainty that will likely allow many lawyers to have a field day. In February, management has cancelled the OS collective labour contract (CLC from now) unilaterally due to unsatisfactory progress in the negotiations, which the union responded to by cancelling the VO CLC as well (one might add that no-one at VO has approved of this or was even consulted beforehand; many see this as high treason by the union). Austrian law states that a cancelled CLC continues to remain in effect for those governed by it at the time of its cancellation until a new agreement is made. So OS staff is now forced to enter a CLC-less space; management has already announced that every previous OS employee will be offered an individual contract with T and Cs probably even below VO standard. Seems like the union has cut its own throat by their actions... But back to the AVRAG, which also states that every employee of the dissolved corporation has a special resignation right that will trigger compensation payments from the employer; sums of up to 39 monthly salaries are expected. And here is where the legal views differ massively. According to the union, these payments are due when the T and Cs applicable after the takeover are much worse than the old ones; management however has taken the point of view that it is not the T and Cs, but the CLC that matters - and as there is no more CLC applicable to the former OS staff, no payments are expected. A field day for lawyers coming up.
So to answer Your questions in a nutshell:
-Yes, the former Austrian staff will join Tyrolean ranks.
-Yes, this is independent of what fleet they are on.
-Yes, wage growth is stopping; but not more than this - there will be no reduction either.
-No, Tyrolean T and Cs are intact and neither present pay nor other schemes are to be reduced.
A strike is possibly in the woods, but only on the OS side of the fence - some actions of OS like the cancellation of the VO CLC have been highly efficient in quenching the solidarity VO staff may have felt before.
Some former OS staff may indeed decide to call it quits and head to the sandbox; figures quoted are ranging from 50 to several 100.
Now, there is an Austrian law on such proceedings - the Arbeitsvertragsrechtsanpassungsgesetz (lovely German word, is it not?), which translates as Law on the adjustment of work contract legislation and is conveniently abbreviated as AVRAG. In short, it demands that the employees of the dissolved, merged corporation are not to have their T and Cs reduced and have to be treated as if they had been employees of the company taking over from the beginning. Consequently, OS staffs income will be frozen at current values until the figures according to VO contract have caught up in some years and only then be raised. Also, the seniority lists will be joined according to the dates of entry into the respective employees initial contract. For VO original staff, the T and C remains intact.
But there is a large source of uncertainty that will likely allow many lawyers to have a field day. In February, management has cancelled the OS collective labour contract (CLC from now) unilaterally due to unsatisfactory progress in the negotiations, which the union responded to by cancelling the VO CLC as well (one might add that no-one at VO has approved of this or was even consulted beforehand; many see this as high treason by the union). Austrian law states that a cancelled CLC continues to remain in effect for those governed by it at the time of its cancellation until a new agreement is made. So OS staff is now forced to enter a CLC-less space; management has already announced that every previous OS employee will be offered an individual contract with T and Cs probably even below VO standard. Seems like the union has cut its own throat by their actions... But back to the AVRAG, which also states that every employee of the dissolved corporation has a special resignation right that will trigger compensation payments from the employer; sums of up to 39 monthly salaries are expected. And here is where the legal views differ massively. According to the union, these payments are due when the T and Cs applicable after the takeover are much worse than the old ones; management however has taken the point of view that it is not the T and Cs, but the CLC that matters - and as there is no more CLC applicable to the former OS staff, no payments are expected. A field day for lawyers coming up.
So to answer Your questions in a nutshell:
-Yes, the former Austrian staff will join Tyrolean ranks.
-Yes, this is independent of what fleet they are on.
-Yes, wage growth is stopping; but not more than this - there will be no reduction either.
-No, Tyrolean T and Cs are intact and neither present pay nor other schemes are to be reduced.
A strike is possibly in the woods, but only on the OS side of the fence - some actions of OS like the cancellation of the VO CLC have been highly efficient in quenching the solidarity VO staff may have felt before.
Some former OS staff may indeed decide to call it quits and head to the sandbox; figures quoted are ranging from 50 to several 100.
While it seems to be the aim to merge the entire former OS flight operation into VO, indeed the AOC seems to be an issue. Neither AOC nor OM-A at VO cover long range or augmented crew operations at the moment; I do assume that this will be amended until the amalgamation is set in force. Currently, 1st of July is eyed as first possible date; no further information on this has leaked until now.
Whether the OS AOC will be kept alive for brand name reasons, I do not know either - if I may speculate, I will look at Swiss who apparently has allowed some small US charter corporation to use the old Swissair brand in order not to forfeit it (see Swissair hebt wieder ab - News Wirtschaft: Unternehmen - tagesanzeiger.ch - in German only unfortunately) and assume that OS might consider the same strategy.
We shall see what happens - interesting times indeed...
Whether the OS AOC will be kept alive for brand name reasons, I do not know either - if I may speculate, I will look at Swiss who apparently has allowed some small US charter corporation to use the old Swissair brand in order not to forfeit it (see Swissair hebt wieder ab - News Wirtschaft: Unternehmen - tagesanzeiger.ch - in German only unfortunately) and assume that OS might consider the same strategy.
We shall see what happens - interesting times indeed...
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We merged a longrange airline into a shorthaul one last year. Took around 6 months to get everything ready, all route rights, EROPS approval and so on could be preserved. However, due to german labour law all pilot conditions had to preserved as well, which is not really the aim at austrian. But labour laws are different in each european country. The OM-A changes were extensive, but manageable.
