Vienna-based Austrian Airlines (OS) decided late Monday to transfer the company’s mainline operations—which include about 80 aircraft and 2,100 employees—to subsidiary Tyrolean Airways from July 1 after failing to reach agreement with labor representatives.
The move surprised industry analysts after OS announced earlier it had struck a tentative agreement with pilots and flight attendants, heading off the carrier’s plans to shift their contracts to Innsbruck-based Tyrolean with less generous terms. However, negotiations over the past two weeks “proved impossible to reach agreement over principles” with the company’s works council.
In a statement, the company said the executive board views this as a measure to secure OS’s future, abolish automatic salary increases and introduce a modern collective agreement. The move is part of a €220 million ($289.7 million) cost-cutting plan.
“What our staff need now is clarity,” CEO Jaan Albrecht said in a statement. “I remain convinced that this path offers us a perspective for the future. The integration could cost OS around €160 million. Forty-three OS pilots have already left.
OS and Tyrolean have formed a team to carry out the integration work by the end of 2012.
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