Ryanair threatens to shut Lauda's main base in Vienna, O'Leary says

FILE PHOTO: Ryanair Chief Executive Michael O'Leary addresses a news conference in Vienna, Austria, March 28, 2018. REUTERS/Heinz-Peter Bader/File Photo

DUBLIN (Reuters) - Ryanair RYA.I will shut down the main Vienna base of its Austrian airline Lauda and bring in Ryanair jets instead unless staff there agree to a pay cut and a new labor agreement, Chief Executive Michael O'Leary said on Friday.

Ryanair bought the Austrian airline from Former Formula One racing champion Niki Lauda in 2018 as part of a move to a broader structure with several airline brands but it has struggled to get costs down in line with its main fleet.

“Lauda is having a very difficult conversation with the Austrian Airlines union down there. We have given them until May 20 to accept significant pay cuts and a new CLA” (collective labour agreement), O’Leary told Reuters in an interview.

If they refuse, the airline’s Austrian base will close and Ryanair will step up in Vienna, he said.

“If you close Lauda, it will return as Ryanair: bigger and badder than Lauda ever was.”

Lauda’s Airbus A320 fleet would be replaced at the airport by Ryanair Boeing 737s, he said. Ryanair said earlier on Friday that it was in talks with Lauda’s lessors about cutting planned aircraft deliveries.

Ryanair has already transferred all of Lauda’s slots in Vienna to Ryanair ahead of the labor talks deadline but Lauda’s base would be retained if the new terms were accepted by its staff, O’Leary said.

“If the unions sign the revised deal ... then the Lauda A320 base will stay in Vienna and it will grow,” he said. “I would hope that the unions down there will see sense.”

Reporting by Conor Humphries; Editing by David Clarke