Ryanair’s Threat on Jobs Extends to Pilots at Lauda in Austria

(Bloomberg) -- Ryanair Holdings Plc's planned cull of pilots has reached the Irish group's Austrian subsidiary, with workers there told that the positions of 30 flight-deck crews are at risk.

Laudamotion Chief Executive Officer Andreas Gruber said in a letter to employees that the jobs will need to go if an agreement on savings and new flight rosters can't be reached with unions in the next two weeks. A spokesman for the German pilots' labor group Union Vereinigung Cockpit confirmed the letter was sent to the carrier's staff. Ryanair declined to comment on details.

Europe's biggest discount airline said this week it would need to cut 900 jobs as it grapples with slumping fares, uncertainty around Brexit and a slowdown in expansion forced by the grounding of Boeing Co.'s 737 Max jetliner. The letter from Gruber seems to offer more scope for negotiation than at Ryanair, which said posts need to go and that the only question is where.

Gruber said he expects a 50 million-euro ($55 million) loss this year -- down from a wider loss of 140 million euros in 2018 -- as Lauda grapples with the impact of rising fuel costs, low fares and higher pay. He described the figure as unsustainable and said productivity improvements are vital if Lauda is to compete with discount rival Wizz Air Holdings and the Austrian Air and Eurowings arms of Deutsche Lufthansa AG.

“We will be giving our people as much notice as possible of any cuts and we are sorry that we have to take this step, but it is imperative for the future survival of the business,” Gruber wrote in the letter.

The CEO added that the company's Vienna operation is “high cost,” putting plans to deploy four extra aircraft there this winter in doubt. Ryanair could alternatively establish its own base there at a lower cost, he warned.

Lauda operates Airbus SE planes so isn't affected by the Max grounding that Ryanair CEO Michael O'Leary said will rob the carrier of many new planes due by next summer. Ryanair kept its full-year earnings outlook this week as a fare war also ate into quarterly profit.

To contact the reporters on this story: Simon Foy in London at sfoy8@bloomberg.net;Richard Weiss in Frankfurt at rweiss5@bloomberg.net

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net, Christopher Jasper, Tara Patel