Austrian Airlines Will Transfer Flight Operations to Tyrolean

Deutsche Lufthansa AG (LHA)’s Austrian Airlines subsidiary will transfer all flight operations, with about 80 aircraft and 2,100 employees, to its Tyrolean Airways unit to cut costs and improve profitability.

The company made the decision, which will take effect on July 1, after it proved “impossible to reach agreement over principles” with the company’s works council, Vienna-based Austrian said in an e-mailed statement last night.

The transfer of flight operations to Innsbruck-based Tyrolean, where contracts are 25 percent less costly, will help Austrian to make 220 million euros ($292 million) of cost savings. The company posted a 62 million-euro loss in 2011.

“The executive board views this as a measure which will secure the future of Austrian Airlines, as the step will result in automatic salary increases being abolished, and a modern collective agreement introduced,” the company said.

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