The Lufthansa Group will cut up to 800 jobs at Austrian
Airlines and centralize its operations solely from its Vienna hub in an effort
to trim 90 million euros in costs from the carrier by the end of 2021.
In the group's third-quarter earnings call, CEO Carsten
Spohr said that Austrian is facing "the mother of all battles"
against low-cost carriers in Vienna. Besides the personnel cuts, which
executives said largely would come from not filling vacated positions, the
group also is standardizing Austrian's fleet by replacing all Bombardier Dash 7
Q400s with Airbus A320s by 2021.
In addition, the group also is standardizing Brussels
Airlines' fleet and realigning its network, and it is downsizing aircraft in
its cargo unit.
"In an increasingly challenging market environment, it
is more vital than ever that we consistently take every action within our
influence and further reduce our costs," according to CFO Ulrik Svensson.
"We expect all group companies to make their contribution here."
Lufthansa Group's revenues were up 2 percent year over year
to 10.2 billion euros during the third quarter. Traffic was up 3 percent, and
capacity increased 2 percent; load factor was up 0.5 percentage points to 86.3
percent.
While the group said business on North Atlantic routes has
been strong, it is facing "continued pricing pressures in Europe" and
a general global economic slowdown. As such, it is planning limited growth for
its 2019-2020 winter schedule and is cutting capacity for Eurowings.
The group reported a net profit of 1.2 billion euros in the
quarter, up from 1.1 billion euros in the third quarter of 2018.
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