refund for prepaid seat assignments on a cancelled flight?

It is common so If you have not you should fill out their seat reservation refund form also:
https://www.austrian.com/Contact/All%20about%20your%20flight/All%20about%20your%20flight%20subform.aspx?cform=17

Even if Austrian isn't required to compensate you for downgrading you to a less comfortable airline, they might do so anyway as a courtesy, and you have nothing to lose by asking. If you want, you can contact them explaining what you've said here - that you could have booked the Air Canada Rouge flight in the first place, but you chose to pay more to fly on what you feel is the superior airline, and you're disappointed with how things turned out due to Austrian's mechanical issue. If you incurred any additional expenses due to the change (e.g., if you had to buy a meal in the Venice airport that Austrian would otherwise have provided), that's also relevant.

My experience with this: Last year I was on a Delta domestic flight that was delayed due to a mechanical issue, and as a result I had to take a $50 cab ride home from the airport instead of a $3 train ride. I explained to them that I'd chosen that flight, rather than a cheaper flight on another carrier, specifically because it was scheduled to arrive before the trains stopped running, and I asked them to reimburse me for the cab ride. I wasn't expecting them to actually do it (I thought maybe in the best case I'd get some scrip for a future flight, and in the worst case I'd feel better for having vented to them), but they did. It took a while, but I got a $50 check in the mail.

Thank you both! I have completed the form at the link sent by Jazz....hopefully Austrian will get back to me soon.

Aargh! I got an email reply that basically said they didn't have to compensate me for seats since I had seats on the Air Canada Rouge flight. But the main point is that I paid for two sets of seats on two flights, and should at least be reimbursed for one set of seats! The secondary point is the seats weren't as good as those I'd chosen, and I deliberately didn't choose Air Canada Rouge to begin with because of the lack of amenities. It looks like the only phone contact is to Vienna, and I don't have international calling. Any further suggestions?
Thanks!

Ruth, I feel your pain. You might try getting the contact information for someone higher up in customer service. It's been my experience that your first point of contact is usually not able to help in situations like these. As the saying goes, "never take no as an anawer by someone who has no authority to say yes". I think emails are so impersonal in situations like this and so easy for the person on the other end to just blow off. I would call the airline's customer service department and c as for a supervisor. Be very nice and explain to them that you chose their more expensive flight for the added comfort you knew you would get. Ask them what they can do for you. Keep escalating up if need be. I've flown Air Canada Rouge.....it's a pretty grim experiance. Who doesn't serve coffee in the morning after an overnight flight to Europe? Not Air Canada Rouge I can tell you!!! I won't go into all the other complaints I have about them
Hoping you get a good resolution to your issue with Austrian Air.

Before you contact Austrian Airlines management, read their contract of carriage. Yes, it's a ton of small print but examine what their legal team mandated about flights they cancel due to their own problems (not force majeure) and what specifically they stipulate about refunding the premium fee of seat selection when you are assigned seats randomly on another airline's aircraft.

Check the EU passenger rights regarding canceled flights. They may superceed the airline positions. Last I checked mechanical difficulties were not an exemption for payments.

Your flight was delayed more than five hours and it was not because of weather or a strike and they did not give you two weeks notice; so you should file a claim directly with them using this form:

https://ec.europa.eu/transport/sites/transport/files/themes/passengers/air/doc/complain_form/eu_complaint_form_en.pdf
and upload it to
https://www.austrian.com/Contact/Suggestions%20and%20comments/Suggestions%20and%20comments%20form.aspx

or mail it to them,

It worked for me

Hi everyone -- I wasn't able to contact Austrian by phone yesterday because of the time difference. I did, however, respond to the email telling them their response didn't address my concerns. I got another email back today. The representative still doesn't acknowledge that I paid for 6 seats (3 on each of 2 planes) and only occupied 3 seats on one plane and am therefore due a refund. However, to "attempt to bring your negative experience to a positive end" he gifted each of us a 50 euro voucher for further travel. I'm not sure how useful that will be as I am not expecting to be able to fly on Austrian Air anytime soon....but at least it's something. The email also says I am to "consider this our final decision" on the matter. It's better than nothing, I guess...

Jazz, I believe I do not qualify for any other compensation from the airline, because despite the fact that (being delayed an extra hour) the Air Canada Rouge flight left Venice 6 hours after the original first flight was scheduled to depart, we actually arrived in Toronto less than 3 hours late, since we flew direct and didn't have a 2+ hour layover in Vienna. Everything I've read says compensation is based on one's final arrival being delayed more than 3 hours. I wish we would have known about the change ahead of time so we didn't have to get up at 4:00 a.m. and spend so much time in the Venice Airport, but it is possible Austrian notified me sometime after we checked in on line and before we arrived at the airport the next day. When I got back to the US and changed out my SIM card, I recieved a text from Austrian saying our flight had been changed. All my texts arrived at once dated the day I inserted the US SIM, so I don't know if that text was sent before we got to the airport or upon the agent at the airport making the change. So that was partly my fault for not updating my record at Austrian with my European SIM phone number. Up until that point Austrian Airlines had communicated with me regularly via email, and I didn't even think that they might have texted me.

So really, the only refund I felt I was entitled to was for the seat purchase. In the grand scheme of things, this was a pretty smooth "your flight has been cancelled" experience. I can now legitimately join the chorus of "don't fly Air Canada Rouge" singers, however.
Thanks!

6 week’s ago we flew on Air Canada Rouge, Montreal to Venice, and Barcelona to Montreal.. The worst flight experience of my life. Even the cabin personnel were second, no, third rate. They did have the grace to look a little embarrassed about everything however. And so they should.

A voucher? Useless if you plan not to fly them again. Find out what your legal rights regarding reimbursement for seat assignment premium payments made but not received.

Ouch! You ran into one of the problems with multiple SIM's -- texts go to whichever phone number the sender has in their records, and if that SIM is not in your phone, you don't get the text until you switch it back in. And then, as you noted, the records show when you received the texts, not when they were sent.