(Alliance News) - Budget airline Ryanair Holdings PLC will not carry out its plan to shutter its loss-making subsidiary Lauda in Vienna, the Austrian carrier announced on Monday after employees agreed to a last-minute wage deal.
The management of Ireland-based Ryanair had set several deadlines for Lauda staff to agree to wage cuts and threatened to cut all 500 job at the Lauda base in Vienna as the subsidiary would be moved to a new hub.
However, unionists blocked Ryanair's proposal, arguing that the new entry-level wages were below the poverty line.
After union representatives and Austria's chamber of commerce agreed on a new wage cut deal last week, Lauda staff approved it in a poll on the weekend.
However, some jobs will be cut, and the number of Lauda's Airbus aircraft in Vienna will be reduced from 16 to 10, the Austrian low-cost carrier said in a statement.
"We will need these cost efficiencies if we are to successfully compete against the state subsidised Lufthansa subsidiary,"Â Lauda Chief Executives Andreas Gruber and David O'Brien said, in a stab against the government bailout of Austrian Airlines.
The Lauda fleet that was grounded because of the coronavirus pandemic will gradually start flying again on July 1.
Ryanair shares closed 0.6% lower at EUR12.80 each in London on Monday.
source: dpa
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