Austrian Airlines in Jump Seat

The Austrian Airlines (AUA) trade union has unilaterally cancelled the wage agreement for 950 on-board staff of the subsidiary Tyrolean, deepening its standoff with the management of the crisis-hit company.

The move came after management suspended the agreement for 2,400 AUA staff in February with a view to adjusting wages to the cheaper rate governing Tyrolean.

With both agreements dissolved, wages will now have to be re-negotiated for the entire company.

But both sides are under pressure from AUA’s owner, Frankfurt-based Lufthansa, to reach an agreement in time for a board meeting on 5 April, or they risk losing a badly needed capital injection of €140 million.

AUA is forced to make savings after running a loss of €60 million in 2011, and similar losses in the year before, but board member Stefan Lauer of Lufthansa has ruled out the firm’s closure, Der Standard reported.

Meanwhile, AUA has announced a rise in its fares starting this month, with increases of €10 for European flights, and €20 for long-distance flights in Economy Class and €60 in Business Class.