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Database of national-level policy measures

Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure AT-2020-21/1399 Updated – measures in Austria

€300 million salary waiver to save Austrian Airlines

300€ Gehaltsverzicht zur Rettung der Austrian Airlines

Country Austria , applies nationwide
Time period Temporary, 21 May 2020 – 31 December 2024
Context COVID-19
Type Bipartite collective agreements
Category Employment protection and retention
– Wage flexibility
Author Bernadette Allinger (Forba) and Eurofound
Measure added 04 November 2020 (updated 21 April 2021)

Background information

Airline travel and thus airlines have been particularly hard hit by the COVID-19 pandemic and the encompassing travel restrictions. Austrian Airlines, a subsidiary of the German Lufthansa, is to receive - after lengthy negotiations - €450 million worth in government aid, in order to prevent insolvency. In addition, staff are to remain on short-time work until 2022 and staff reductions (of around 1,100) will also have to be implemented (mostly via natural fluctuations, after the short-time work period, according to the airline). Furthermore, a €300 million savings package in personnel costs was negotiated between management and works council, to be implemented until 2024.

Content of measure

This means that personnel will have to waive up to 15% of their wages, with expected savings of around €80 million per year. After short-time work has run out (expected in 2022), gradual wage decreases will be implemented:

  • Ground staff (technicians, commercial staff) will waive between two and 15% of their wages between 20 March 2022 and 31 December 2023, depending on their current wages.
  • Flight staff (pilots, flight attendants) will waive between 5.9% and 12.7% of their wages and pension fund contributions between 2022 and 2024.

This will help the airline save personnel costs in the range of 20% , according to Austrian Airlines, and allows the company to refrain from crisis-driven dismissals and retain as many staff members as possible.

Updates

The following updates to this measure have been made after it came into effect.

25 March 2021

On 25 March 2021, the company increased the number of necessary job cuts from 1,100 to 1,350.

Use of measure

All around 7,000 employees are concerned by these wage cuts.

Contents

  • Pay freezes or cuts

Target groups

Workers Businesses Citizens
Employees in standard employment
Does not apply to businesses Does not apply to citizens

Actors and funding

Actors Funding
Social partners jointly
Company / Companies
Employees

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Agreed (outcome) incl. social partner initiative Agreed (outcome) incl. social partner initiative
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • Social partners jointly
  • Main level of involvement: Company level

Involvement

This measure was negotiated and agreed upon between management and works council at the company level.

Views and reactions

Both sides are supportive.

Sectors and occupations

    • Economic area Sector (NACE level 2)
      H - Transportation And Storage H51 Air transport

This case is not occupation-specific.

Sources

Citation

Eurofound (2020), €300 million salary waiver to save Austrian Airlines, measure AT-2020-21/1399 (measures in Austria), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/AT-2020-21_1399.html

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