MIAMI – Lufthansa subsidiary Austrian Airlines (OS) expects its business to end up a fifth smaller by 2022 and to have cut the number of its employees by around 1,100 from its current 7,000-strong workforce.

The Austrian government today announced it has agreed on the group’s €450m ($506m) bailout to protect Vienna as a transit hub and safeguard “the bulk” of the flag carrier jobs.

As quoted by newspaper Der Standard, Os CEO Alexis von Hoensbroech said, “Our goal is 80% of the former size of the company in 2022, which from today’s perspective would mean 1,100 employees too many.”

No layoffs planned, same growth rates as other hubs

In an interview released this weekend, OS CEO said the airline was planning two years of short-time work, adding that there could be no layoffs for that long, and assuming that “we will achieve a large part of the reduction by 2022 through fluctuation.”

In total, the bailout deal includes €300m in loans from a banking consortium, of which 90% will be guaranteed by the state, and €150m will come in the form of grants.

The newspaper cited Lufthansa CEO as saying the deal — which stipulates that the Vienna hub must grow at the same rate as Munich, Frankfurt, and Zurich — is only valid until 2023.

The CEO rightfully understands this to mean that the Vienna hub cannot be put at a disadvantage in the gradual ramp-up of flight operations. After that we will continue to grow, but we will then have to finance this growth ourselves.”

A steady ramp-up of operations

On May 29, OS announced the restart of flights as of today to European destinations and Tel Aviv in the Middle East, with such steady ramp-ups resulting in around 40 destinations becoming operational by the end of June.

Operations will begin initially with services to London, Paris and Brussels before the further expansion of routes to happen within this week.