August 19, 2020

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August 19, 2020

AUA: Blümel requires immediate bonus repayment

Finance Minister Gernot Blümel (ÖVP) is now increasing the pressure on Austrian Airlines regarding the distribution of bonuses amounting to around 2,9 million euros to the board of directors and around 200 managers. He is now calling on the AUA board, led by Alexis von Hoensbroech, to repay the bonuses paid out at the end of July 2020 for 2019. The government member told the Kurier that the AUA board was of the opinion that the payment was legally correct, but Blümel said: "Morally, the action is a punch in the stomach." He is now demanding immediate repayment. "Taking advantage of state aid for the company, having employees on short-time work and at the same time paying out bonuses as a board member is completely unacceptable. I expect the board to repay the bonus immediately," Blümel told the daily newspaper Österreich. 

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State aid for Lufthansa will be reduced

The state aid and loan guarantees granted by the governments of Belgium, Austria and Switzerland to Brussels Airlines, Austrian Airlines and Swiss as well as Edelweiss will be deducted in Germany. This means that the volume of German state aid for Lufthansa will fall from nine to seven billion euros. On Monday, the Economic Stabilization Fund gave the green light for the rescue packages for the Kranich subsidiaries in Austria, Belgium and Switzerland. The conditions granted by the three states for the rescue packages for the respective airlines vary greatly.

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Finance Minister Blümel angry about AUA bonuses

Finance Minister Gernot Blümel (ÖVP) describes the bonus payments that Austrian Airlines paid to management at the end of July 2020 for services in the 2019 financial year, which ended with a small profit of 19 million euros, as "insensitive". The government member told various media outlets and the Austria Press Agency that the company's behavior "lacked any sensitivity". The approach that AUA has chosen is incomprehensible to him. "We have put together a very good package to secure jobs and give the location a perspective. I expect the AUA board to live up to its responsibility, find a solution for this and, in addition, that the outstanding refunds of ticket prices by AUA will be dealt with immediately," said Blümel. But the minister has also received considerable criticism from the opposition for his statements. The SPÖ, the FPÖ and the union are calling for a ban on bonus payments. National Council member Peter Wurm (FPÖ) commented: "While the board members of a state-supported airline are lining their pockets with bonus payments despite high losses, domestic consumers have to wait months for their flight ticket refunds. This is a new scandal for which the black-green government is solely responsible. But the Green Consumer Protection Minister Anschober has not yet said a single word about it or stood up for the interests of consumers. Due to the lack of consumer protection policy from the ministry, small consumers in this country seem to be coming off worse, but not everyone can be an AUA board member, Mr. Minister! This matter has long been a test of patience for the

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Vida strongly criticizes AUA bonuses

The airline Austrian Airlines, which receives hundreds of millions of euros in state support from the Republic of Austria as well as loan guarantees, is said to have paid out around 2,9 million euros to management in the middle of the corona crisis. Although the company emphasizes that these were back payments for 2019, the Vida union has strongly criticized the process. "It seems to me as if Finance Minister Blümel is crying over spilt milk. After all, this kind of thing hasn't just been happening today. Appeals to companies and lip service are therefore not enough. What is finally needed are clear legal rules that if corporations are supported with taxpayers' money and savings are made on employees, no additional bonuses can be paid to managers who are already well paid," said Vida Chairman Roman Hebenstreit. "And that doesn't just apply to the current case of AUA, it must apply to managers of all corporations. Hard-working and tax-paying people are always the first to have to accept cuts in the form of unemployment or short-time work due to financial and economic crises or, as is the case now, the Corona crisis. As taxpayers, they also have to absorb the losses of companies. Their understanding of bonus payments to managers is therefore likely to be limited." The trade unionist stresses that although the bonus regulation is based on performance from the previous year and the Corona crisis was not yet foreseeable at that time, it remains to be questioned whether such management payments are justified, especially since consumers are also waiting for their ticket costs to be refunded and employees have to accept reduced salaries, says Hebenstreit. "Hard-working taxpayers cannot

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Boeing offers golden handshakes

The US aircraft manufacturer Boeing is said to be continuing to reduce its workforce. For example, it is trying to offer severance payments in two divisions to encourage employees to leave the company. According to Bloomberg, the service and commercial aircraft sectors are primarily affected. The company did not want to comment on the agency's report. An internal circular is demanding that the workforce take current demand on the global market into account and support the austerity measures. Boeing announced in April 2020 that 16.000 employees would be laid off. Further measures were announced at the end of July 2020. It is currently assumed that 19.000 jobs will be lost. According to Boeing, around 6.000 employees have already left the company. Competitor Airbus is also having to cut around 15.000 jobs due to the corona crisis.

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British Airways: First Boeing 747 phased out

IAG Group member British Airways is initiating the early retirement of part of its Boeing 747-400 fleet. The first aircraft was flown from Heathrow to Spain for scrapping on Tuesday. The Corona crisis has led to the original plan being scrapped. British Airways actually only wanted to phase out the four-engine aircraft in 2024. This has now been accelerated and will in future mainly rely on Boeing 787s and Airbus A350s. The "mini-jumbo", Airbus A318, which was used on the London City-New York route, has also left the fleet in the meantime. The route was served with pure business class seating and will be abandoned for good.

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Spain tips 206 layoffs at Ryanair

The Irish low-cost airline Ryanair is not allowed to lay off 206 employees in Spain for the time being. The government prohibited the company from doing so, arguing that legal provisions were not complied with and that the carrier only wanted to save on social security contributions and taxes. The matter has a long history, as on January 9, 2020, Ryanair laid off a total of 244 Spanish employees at various bases. A court overturned this and ordered immediate reinstatement. The carrier did not adequately explain the reasons that led to the closure of the stations and thus to the layoffs and also disregarded the legally required involvement of employee representatives. Just on the day the verdict was announced, Ryanair is said to have issued another 206 layoffs and again failed to involve the unions. The Spanish Ministry of Labor has now banned the plan. Ryanair can appeal the decision before the Spanish National Court. 

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Green light for SAS state aid

On Tuesday, the EU Commission gave the green light to the state aid package for Star Alliance member SAS. Sweden, Denmark and an investor will provide the company with around 1,64 billion US dollars. Now it's the shareholders' turn, as they must also give their approval by September 22, 2020. In connection with the acceptance of state support, SAS will carry out a thorough restructuring. The elimination of many jobs is also planned.

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Kassel-Calden: Sundair cancels Palma

The German holiday airline Sundair is canceling all flights to Palma de Mallorca that were previously offered from Kassel-Calden, effective August 19, 2020. According to a report in the regional newspaper HNA, there have been no positive PCR tests so far, but demand has collapsed. The company told the media that flights to Crete will continue to operate. There has been a sharp decline on the Palma route, which is why it now has to be discontinued. This is of course another setback for Kassel-Calden Airport, which had very little capacity even before the corona pandemic.

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Eurowings: demand collapsed

Due to weak demand, the Lufthansa subsidiary Eurowings is currently revising its plans for the fall. Company boss Jens Bischof said in a video conference that capacity utilization has fallen by about a quarter in recent days. This is mainly due to the fact that passengers from tour operators are staying away. The fact that Germany has declared the EU country Spain a risk area in particular is having a negative impact on demand at Eurowings. There was an immediate drop of about 30 percent. The company is still monitoring further developments and does not want to make any adjustments to the flight schedule. However, according to Bischof, no further aircraft can be reactivated for the time being. 51 aircraft are currently in use and this could remain the case for the time being, as the manager sees around 50 aircraft as a realistic fleet size for the winter flight schedule. Eurowings is currently planning 2021 aircraft for summer 80. They are also working on other additional products, which Bischof described as "a kind of corona insurance". The airline boss has not yet announced further details.

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