Thursday July 2, 07:40 PM
Austrian Airlines to cut 1,000 jobs: company
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VIENNA (AFP) - Austrian Airlines (Vienna: 675054.VI - news) said Thursday it would cut 1,000 jobs following record losses in 2008 and amid a troubled bid by German flag carrier Lufthansa (Xetra: 823212 - news) to take over the company.
A restructuring drive aimed at creating a more efficient company "will also result in downsizing at the company, with some 1,000 posts to be cut by mid-2010," the firm said in a statement.
AUA currently has around 8,000 employees after cutting hundreds of jobs over the past three years as part of a cost-cutting drive.
The Austrian airline has debts of 225 million euros (315 million dollars) and reported a net loss of 429.5 million euros last year -- a record slump.
AUA chief commercial officer Andreas Bierwirth and chief operations officer Peter Malanik said the economic crisis had shown "just how important it is that the company be restructured if it is to be well-positioned for the future."
AUA is in the process of being taken over by Lufthansa but the deal hit a snag on Wednesday when the European Commission said it would open an in-depth investigation into the takeover because of fears over anti-trust issues.
Competition Commissioner Neelie Kroes said the deal could lead to higher ticket prices for passengers and fewer flights on some routes.
Lufthansa said it was surprised by the decision but still confident that EU competition authorities would eventually approve the deal.
Analysts say the probe threatens the whole deal since Lufthansa could pull out if there is no approval by July 31.
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