June 14, 2020 / 9:47 AM / a month ago

Austrian Airlines expects company to be 20% smaller in 2022-CEO

ZURICH, June 14 (Reuters) - Austrian Airlines expects its business to end up a fifth smaller by 2022 and to have cut the number of its employees by around 1,100 from 7,000 currently, the head of the Deutsche Lufthansa subsidiary told a newspaper.

Austria has agreed a 450 million euro ($506 million) bailout for the group that will protect Vienna as a transit hub and safeguard “the bulk” of the flag carrier’s jobs, the government said on Monday.

“Our goal is 80% of the former size of the company in 2022, which from today’s perspective would mean 1,100 employees too many,” Alexis von Hoensbroech was quoted as saying by Der Standard when asked about job cuts.

“We are planning two years of short-time work, there can be no layoffs for that long, and we assume that we will achieve a large part of the reduction by 2022 through fluctuation,” he said in the interview released at the weekend.

The bailout deal amid the coronavirus pandemic comprises 300 million euros in loans by a banking consortium, 90% of which will be guaranteed by the state, and 150 million euros in grants.

The paper cited Lufthansa’s chief executive as saying the deal — which stipulates that the Vienna hub must grow at the same rate as Munich, Frankfurt and Zurich — is valid only until 2023. “Exactly,” von Hoensbroech said. “This means that the Vienna hub cannot be put at a disadvantage in the successive ramp-up of flight operations. After that we will continue to grow, but we will then have to finance this growth ourselves.”

$1 = 0.8886 euros Reporting by Michael Shields;Editing by Elaine Hardcastle

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