Austrian Airlines is cutting back its administrative staff as it strives to return to profitability for the first time in six years.
The Alpine carrier is bundling desk-based jobs for the flight-operations and engineering departments at its Vienna-based mainline operation and Innsbruck-based regional arm Tyrolean Airways. The move will involve "up to 150" job cuts and should be completed in 2014, says the airline, a wholly owned Lufthansa subsidiary.
Together with a long-haul network expansion that is to generate more revenue, the cutbacks should raise Austrian’s gross profit by €40 million ($54 million) by 2015, it adds.
The reorganisation will, for example, include the closure of Tyrolean’s traffic-control centre in Innsbruck. The corresponding Vienna department will become responsible for all operations.
Part M fleet technical management functions, such as engineering and maintenance planning and control, will also be concentrated in the capital.
Austrian says, however, that the technical MRO operations for the Airbus fleet in Vienna, Bombardier Dash 8s in Innsbruck, and Fokker aircraft in Bratislava, Slovakia, will continue as before.
The administrative cutbacks come after Austrian transferred its flight operations to Tyrolean in 2012 due to the latter’s lower cost base. This involved closing duplicated departments for pilots and cabin crew as well as certain administrative functions.
That first wave of reorganisation improved the airline’s gross profit by €220 million.
The airline has no choice but to "remove... organisational duplications that have existed for years", says chief executive Jaan Albrecht.
After Austrian made a profit for the last time in 2007, the airline now expects to deliver a "low double-digit" profit for the current year.
Between January and September, the carrier generate an operating profit of €19 million. It made €210 million during the same period in 2012. However, the airline says that figure was mainly due to positive one-off effects from the Tyrolean transfer. Operating profit came in at €9 million.
Despite the administrative cutbacks, Austrian says that its recruiting 230 new cabin-crew members as it adds a long-haul aircraft to its fleet for the summer 2014 schedule.