Austrian Airlines plans further cost cuts

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Austrian Airlines is preparing a new cost-cutting programme as it becomes clear that the efficiency measures introduced over the last two years will not be sufficient to return the carrier to profitability.

The airline's management informed staff in a letter earlier this month that it is revising its commercial planning for 2012 to ensure that the company achieves a "positive operational result".

"The economical assumptions, which we were still able to apply in September, are not valid anymore," said the letter, which was signed by the new chief executive Jaan Albrecht, chief operating officer Peter Malanik and chief commercial officer Andreas Bierwirth.

Aside from the economic woes in the European Union and a growing sense of insecurity among consumers, the company cited high costs and increased competition at its Vienna base.

"The situation is more difficult for us than many other airlines because the local conditions are worse in Vienna," the letter said.

Aside from citing high fees for air navigation service provider Austro Control and air passenger taxes, the airline emphasised the relatively small size of its home market and increasing competition from Air Berlin and Emirates in Vienna.

An Austrian spokesman said that the carrier will cut costs both internally and with external suppliers. He declined to specify the target for the savings.

The staff letter said that the employees had made an "enormous effort" over the past two years and achieved "much" in terms of cost savings and implementing a new strategy. However, this was not enough to overcome the new challenges.