DUBLIN, May 18 (Reuters) - Ryanair’s Austrian subsidiary Lauda faces an “existential crisis” and its main Vienna base appears likely to close at the end of May, group chief executive Michael O’Leary said on Monday.
Ryanair in recent weeks has warned that the Austrian airline, which it purchased in 2018, was underperforming and said its Vienna base would close unless unions accepted a new collective labour agreement.
Ryanair has also said it was likely to replace 30 Airbus jets at Lauda, the only part of the Ryanair group not to fly Boeing 737s, with Boeing jets. O’Leary on Monday said Ryanair had cancelled eight A320s that were due for delivery to Lauda from leasing companies.
“As a result of the COVID-19 pandemic, Lauda is facing an existential crisis,” O’Leary said in a video presentation released alongside its full-year financial results, saying the only way it could survive was with a deep restructuring of the Vienna operation.
“I think it is likely that the Vienna base will close at the end of May because we don’t see the union... agreeing to these reforms,” O’Leary said, adding that if they did accept them the airline would “thrive”.
The Vienna base hosts 15 of Lauda’s 30 A320s. Lauda’s other bases in Stuttgart, Dusseldorf and Palma would remain open, O’Leary said.
Reporting by Conor Humphries; Editing by Kim Coghill