Austrian Air Unveils EUR425 Mln Cost Cuts

Financially strapped Austrian Airlines unveiled on Friday a EUR425 million euro (USD$555.9 million) cost-cutting initiative to be implemented by 2012 to withstand a projected fall in passenger volume.

Some EUR225 million in cost reductions will be implemented this year and a further EUR200 million by 2012, said the money-losing airline, which is to be taken over by Germany's Lufthansa in a deal signed last month.

Austrian said it would cut capacity about 10 percent compared with 2008 to achieve savings of EUR115 million. Flights to Mumbai, Burgas and Baia Mare would be dropped by the end of March.

A further EUR110 million in savings this year would be achieved from implementation of more flexible working hours, temporary deferral of salary and pension payments, and a requirement to take accumulated staff leave.

Through these savings, Austrian Airlines intends to attain a margin on earnings before interest and tax of around 6-7 percent, which would provide a basis for future growth, the company added.

On Thursday evening the troubled airline disclosed that chief executive Alfred Oetsch had resigned. His duties on the management board will be assumed by Chief Operations Officer Peter Malanik and Chief Commercial Officer Andreas Bierwirth.

Oetsch said his departure was "designed to enable a new beginning at the company, including at the level of management".

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First China-Built Airbus Due In July

China's Sichuan Airlines will become the world's first carrier to receive an Airbus built outside Europe when it takes delivery in July of an A320 assembled in China, an Airbus staff memo said.

Details of the historic delivery, almost four decades after the plane maker was born as a four-nation European consortium, were disclosed to employees in the internal note this week.

It comes as Airbus prepares to sign separate deals with China over investment in its next model, the A350, which will include new carbon materials and will be assembled in France.

Airbus began assembling some of its A320 model of jets in Tianjin near Beijing in September from fuselage parts shipped from Europe.

According to the memo, the Tianjin factory is now full, with four airframes assembled and a fifth in position.

Airbus and rival Boeing have been turning to Asian markets, led by China, for growth as demand weakens at home.

However, China too is now succumbing to the global economic crisis. In December, Beijing encouraged airlines to cancel or postpone 2009 deliveries due to falling air traffic.

Tianjin A320s are assembled from fuselage parts shipped from factories in France, Germany, Spain and Britain. Airbus aims to reach local Chinese output of four A320s a month by end-2011.

Under pressure over jobs, Airbus says Tianjin will serve the Chinese market and that most construction will remain in Europe.

It says the move will lock in a good slice of the 3,000 new planes Airbus predicts China will need over the next 20 years.

But it faces criticism from European unions who say the move adds to outsourcing fears amid the recession and could result in the loss of European technology to a potential jet maker rival.

Airbus has suspended plans to lift total A320-family output to 40 planes a month from 36 due to the global economic crisis.

For now its Chinese production plans remain intact. So if the overall output freeze lingers, assembly of up to 4 planes a month could be transferred to China from Europe. However, with the industry in turmoil due to a drop in air travel, Airbus has said it cannot make firm predictions even for 2009.

Most analysts expect production to be hit everywhere as the recession bites before rebounding on signs of recovery.

Sichuan Airlines, a mid-sized carrier partly owned by China Southern Airlines, operates more than 130 routes, almost entirely within China, with a fleet of 40 jets.

Details of the first Airbus to be made in China emerged as EADS invited China to produce high-tech materials for its next generation of Airbus, the future mid-sized lightweight A350.

A deal to build a plant in Harbin was due to be signed on a visit to Spain by Chinese Premier Wen Jiabao on Friday.

Another deal is expected as he visits Britain on Monday, when Xi'an Aircraft International will sign a parts manufacturing agreement with Airbus, a person familiar with the transaction said.

Spain has a 5 percent stake in EADS, which is controlled by French and German interests with two factories also in Britain.

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SWISS

Swiss International Air Lines is closely linked with Switzerland in more than name only. Classic Swiss values such as quality, reliability and hospitality make flying with SWISS a distinctive travel experience.

Founded as Switzerland’s national airline in 2002 as the successor to Crossair, SWISS became a member of the Star Alliance network in 2006. Within this framework, SWISS remains committed to its mission of providing quality air services linking Switzerland with Europe and the world.

SWISS now serves 76 destinations around the world from its Zurich hub and from Basel and Geneva international airports. It operates a fleet of technically advanced aircraft with which it carries some 12.2 million passengers annually. Airbus A330s and A340s are used on intercontinental routes, with the Airbus A320 family and Avro RJ100 aircraft handling short-haul and regional flights.

SWISS understands the needs of customers across the travel spectrum. For those travelling between continents, SWISS offers the luxury and exclusivity of SWISS First, an exceptionally high standard of comfort and calm in SWISS Business or the friendly service of SWISS Economy. On short flights within Europe, SWISS offers complete flexibility from full-service in SWISS Business to a more streamlined product in SWISS Economy. Whichever option is selected, passengers can count on enjoying the personal service on which the more than 6,800 SWISS employees pride themselves. From the moment they book their flight until they step off the aircraft, the focus is on their needs.

The effort involved in striving for quality really pays off when an airline is recognised by its passengers and the industry it is part of. SWISS has collected a number of awards in various categories since its inception, testimony to its commitment to making air travel a pleasurable experience for everyone who boards a SWISS aircraft.

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