The Ryanair Group has announced that its Austrian airline, Lauda, will be shutting down its main Vienna base, with the loss of more than 300 jobs. The airline will close the base next week, on May 29th. This comes as a result of the airline failing to agree on new labor contracts with the workers union.
Lauda to leave Vienna
It was only January last year when Ryanair acquired 100% of Austrian low-cost carrier Lauda. Although the airline was well expected to remain loss-making for some time, the Ryanair Group had some big plans for its acquisition, with a strong focus on Vienna as its hub.
However, it seems those plans are now in tatters, as Reuters reports today that Ryanair will be pulling Lauda out of Vienna in just a week’s time. The move will see more than 300 jobs lost as a result. In a statement carried by RTE, the airline said,
“Lauda deeply regrets the loss of more than 300 jobs for its A320-team and the closing of Lauda’s A320 base in Vienna on Friday May 29.”
Previously, Ryanair CEO Michael O’Leary had warned of this action, if the union was unable to agree to a labor deal. He said that the Group would close down Lauda’s Vienna base, and would bring in Ryanair aircraft instead if employees would not agree to wage cuts and a new employment contract.
Austrian workers union Vida had claimed that the terms of the Ryanair deal were untenable. As such, it appears that the agreement was not reached in time, and now Lauda will be removed from Vienna.
It’s not the end for the Austrian airline, however, as Ryanair has said it will keep its bases in Dusseldorf, Stuttgart, and Palma. It will come as a considerable blow to Lauda fans in Austria, however, who have long remained loyal to their local carrier.
What next for Lauda?
The Vienna base is the airline’s largest and main hub. It is home to 15 of the airline’s 30 Airbus A320 aircraft and forms the base of its operations around Europe. With no base left in Austria, the airline will be reliant on its smaller headquarters in Dusseldorf, Stuttgart, and Palma. There were previously plans in place for Lauda to open a base in Zadar, but that was dropped earlier this week.
O’Leary has been working on cutting costs amid the coronavirus crisis. Although Ryanair expects to begin flights again soon, the Group previously said it expected a difficult year. The Group has already told 250 office workers not to return to their posts in June, while warning of massive job cuts elsewhere before the crisis is over.
While Lauda can likely survive on its remaining bases, the future for the Austrian carrier is looking increasingly bleak. Ryanair had previously said it was not keen to keep the airline’s Airbus fleet, preferring to make it an all-Boeing 737 airline. Now, it seems likely that Lauda could shrink, with Ryanair stepping up to fill the gap in Vienna.
Ryanair’s investment in Lauda was thought to be strategic for a number of reasons. The carrier had previously found it difficult to break into the German-speaking market, where loyalty to national carriers is rife. Lauda was viewed as a stepping stone to Austrian domination, allowing Ryanair to hide its brand behind a company perceived as wholly Austrian.
Founded by the late Niki Lauda, the loss of Lauda will be a harsh blow to Austria. It remains to be seen whether Lauda will survive the current crisis at all, or eventually be absorbed into the main Ryanair brand.