Austrian Airlines presents cornerstones of a new group collective wage agreement

Following the failed negotiations in the year 2012, the entire flight operations of Austrian Airlines were transferred to its subsidiary Tyrolean Airways, encompassing about 1,900 employees and all the aircraft. Now the company is making employees a new offer i.e. a new Austrian Airlines Group collective wage agreement as a means of increasing planning certainty and creating the basis for future decisions. Negotiations designed to work out specific details should be concluded by May 31, 2014. This collective wage agreement opens up the possibility to merge Tyrolean Airways and Austrian Airlines in the future.

"The contents of the offer are based on ten months of joint negotiations with the Works Council, trade union and Austrian Federal Economic Chamber. The new agreement acts as a bridgehead from the past aiming to lead Austrian Airlines into the future. Our employees wish for an agreement and a clear perspective moving forward. They also desire to return to Austrian Airlines. We want to make this possible", says Austrian Airlines CEO Jaan Albrecht.

The cornerstones of the new Group collective wage agreement
The cornerstones of the new Group collective wage agreement are new flight duty rules, a new salary scale, a profit sharing scheme based on the net profit, a revised pension fund model as well as a new career model for the cabin and cockpit staff.

The current flight duty rules are based on the former collective bargaining agreement applying to Tyrolean Airlines. The new stipulations more effectively takes into consideration the demands involved in operating a long-haul fleet. In contrast to the rejected negotiated settlement concluded in 2012, the salaries of the senior staff members formerly with Austrian Airlines will not be reduced but will stay frozen at their current status until the new salary scale catches up to this level. A profit sharing scheme for employees based on the company's net profit is also a new component of the agreement. Austrian Airlines has been operating profitably again since 2013 and will enable its employees to participate in its business success.

Another key feature of the new collective wage agreement is a revised pension fund model. Partial payments will be offered to those employees who were previously covered by the Austrian Airlines company pension plan. Depending on the length of service and the respective position, this ranges from about EUR 15,000 for flight attendants to EUR 305,000 for flight captains. A new career model for the cabin crew and cockpit staff, which also facilitates the transfer between the various staff groups, is also part of the offering.

"The most difficult task was developing a new career model. Other airlines have failed precisely for this reason", states Klaus Froese, Managing Director of Tyrolean Airways. "The centerpiece of our model is a transparent and fair allocation formula for pilots of the regional fleet and pilots of larger types of aircraft to be appointed to vacant plane captain jobs", he adds.

Stability and planning certainty for employees and the company
"We want to offer our employees an improved basis for their own personal career planning. I believe that this package of measures provides a good opportunity for this. Today I have asked the employees to authorize their representatives to carry out negotiations on this", Froese continues.

Last week the negotiating team presented the principal features of the new collective wage agreement to the Works Council for flight and cabin crew (Betriebsrat Bord) of Tyrolean Airways, the Austrian Federal Economic Chamber and the trade union. Now negotiations are to be conducted on specific details of the agreement provided that the Works Council is willing to do so. "I think that we have reached a balanced agreement as the basis for negotiations. Now it is all about getting down to specifics", Froese says. "However, we have to come to a conclusion after ten months of negotiations. The employees want a solution to be reached, and the company must be able to plan ahead."

If an agreement can be reached with the Works Council, this would mean much more to the employees than just working in accordance with a collective wage agreement. A collective agreement for the entire Austrian Airlines Group would serve as the basis for a merger of Tyrolean Airways and Austrian Airlines. For the customers, the bottom line is that there would only be one brand. "Flown by Austrian, operated by Austrian", is the way Froese describes it.

Basis for development of the fleet
"The restructuring measures implemented over the past few years have put Austrian Airlines in a better financial position. We are once again operating profitably and want to take the next steps into the future. We have Lufthansa's support for this", explains Austrian Airlines CEO Jaan Albrecht.

"This year Austrian Airlines will make a forward-looking decision and move ahead with ordering a successor model to its fleet of Fokker aircraft. However, such a significant investment decision cannot be made without a consensus being reached on a collective wage agreement", Albrecht continues.

At the present time the Austrian Airlines Group has a work force of about 6,300 employees, of which about 3,100 employees comprise the cockpit and cabin staff. A new collective agreement with the ground staff was concluded last year with the help of the trade union and the Works Council.