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Senior Austrian Airlines Executives Forced to Pay Back Bonuses After Government Intervention

Senior Austrian Airlines Executives Forced to Pay Back Bonuses After Government Intervention

The board of Austrian Airlines has been forced to pay back hundreds of thousands of Euros in bonuses after facing criticism from Austria’s finance minister who helped the embattled airline out with a multi-million Euro tax-payer funded bailout. Austrian Airlines paid out more than €2.6 million in bonuses to managers earlier this year but only the €500,000 awarded to its four-member board will be voluntarily returned in an effort to appease the Austrian government.

“Taking state aid for the company, having employees on short-time work and at the same time paying out bonuses as a board member is completely unacceptable,” Finance Minister Gernot Blümel blasted on Wednesday.

Austrian Airlines originally shrugged off the criticism, arguing that the bonuses related to performance in 2019 when the company was performing relatively strongly. The board said it had already taken a financial hit after deciding to halve the bonuses but those arguments drew the ire of Blümel who demanded the bonuses be paid back “immediately”.

“We have decided today after consulting with Finance Minister Gernot Bluemel to voluntarily hand back the management board’s bonuses paid for 2019,” Austrian Airlines Chief Executive Alexis von Hoensbroech confirmed on Wednesday.

Already struggling and facing tough competition in its home hub of Vienna, Austrian Airlines reported a loss of €99 million in the first six months of 2020. The airline has blamed the Corona crisis for the massive loss after passenger numbers dived 70 per cent in the quarter.

Austrian Airlines has received a total of €450 million in bailout funds, including €150 million in state aid and a further €300 million in government-backed loans. In return, Lufthansa-owned Austrian Airlines will keep Vienna as a hub airport and will need to meet tough sustainability requirements by 2030.

Hoensbroech has, himself, been a critic of the Austrian government, arguing that a comprehensive COVID-19 testing program needs to be urgently introduced to avoid quarantine for travellers from ‘high risk’ countries.

“Whoever is healthy and not infected should also be allowed to travel,” Hoensbroech said earlier this month. Mass testing programs are currently gaining traction amongst political leaders as a way for travellers to skip quarantine but availability and rules remain patchy and inconsistent.

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