Update on Austrian Airlines Saga

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Senior management at Austrian Airlines and representatives of the employees’ union have reached agreement on a new labour agreement. While the details are yet to be disclosed, the key point is that one option: that of Austrian Airlines becoming an LCC has been avoided. Austrian Airlines CEO Jaan Albrecht stated: “I am relieved. The agreement is the best of all the options open to Austrian Airlines. We managed just in time to prevent the possible reorganisation of the airline. The negotiating partners demonstrated a sense of responsibility.”

What remains unclear is the cost of such an agreement – clearly the deal will be better (and more expensive) than the management’s attempt to force employees into a cheaper deal in 2009 that was rejected in September 2014 by the European Court of Justice. Rather than going to court, management have decided to negotiate. The new deal will affect 3200 employees (flight attendants and pilots). Perhaps key is that senior management will get the OK from Lufthansa Group (the 100% owners of Austrian) to invest up to $1bn euro.

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