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Austrian Airlines

Austrian Airlines is the national airline of Austria and is based at Vienna International Airport. Along with its charter arm, Lauda Air, the carrier operates both domestic and international networks, particularly to Eastern Europe and the Middle East. Austrian's regional carrier, Tyrolean Airways, merged with Austrian on 01-Apr-2015.

Location of Austrian Airlines main hub (Vienna International Airport)


 
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1,232 total articles

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76 total articles

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Lufthansa needs Eurowings to take it to greater heights after 2015's profit improvement

22-Mar-2016 3:27 PM

In 2015 the Lufthansa Group had its most profitable year since 2007, before the global financial crisis. Its profit recovery from the crisis has been cautious, but its increased confidence is now signalled with the restoration of dividend payments to shareholders, proposed at EUR0.50 per share.

Compared with its pre-crisis incarnation, one of the biggest changes in the Lufthansa Group is the establishment and growth of a low cost subsidiary with a clear strategic role. First under the Germanwings brand and now under Eurowings, the group's LCC is increasingly assuming point-to-point flying from the hub airlines on both short/medium haul routes and launching new long haul leisure routes. In 2015 it even made a small profit.

However, labour productivity in the mainline Lufthansa operation remains an impediment to the group's ability to join the leaders of European legacy airlines, in terms of profitability. Eurowings has greater labour flexibility and lower unit costs and has also become important to management as a way to show mainline labour representatives a glimpse of an alternative future. As competitor LCCs grow in Germany both management and unions must seize this future.

Gulf airlines in London Heathrow: slot purchases expand capacity further, improving connectivity

23-Feb-2016 12:29 PM

In the world's most premium air market, London Heathrow, Gulf airlines are increasing their presence. Emirates has obtained a sixth daily slot, the first time in a decade that it will grow above five daily flights at Heathrow (it has meanwhile been growing at Gatwick). Qatar Airways has offered six flights since May-2014 but on smaller aircraft, while Turkish Airlines will have six daily flights on three days a week from Mar-2016. Etihad has not grown slots since last decade but has increased capacity by deploying A380s. Emirates will have an all-A380 operation at Heathrow in Jun-2016.

Oman Air bills itself as a boutique airline focused on Oman, but with a high share of connecting traffic and ambitious growth plans, Oman Air is becoming a Gulf network airline. It paid USD75 million – reportedly a record – for a morning slot at Heathrow in order to have twice daily service. Beside the growth, the Big 3 Gulf airlines hold 2% of international Heathrow slots but account for 5% of seat capacity (more than local airline Virgin Atlantic). Including Oman Air and Turkish they hold 3.5% of slots. London Heathrow is a premium focus of attention but Gulf airlines are growing faster elsewhere in Europe as they diversify their networks away from London and the UK. In 2006, one in two of Emirates' Western European seats went to the UK, but in 2016 only 30% will.

Austrian Airlines: Lufthansa Group's poor relation may have improved revenue & profit growth in 2015

19-Jan-2016 6:50 PM

In 2015, Austrian Airlines' passenger numbers fell for the third successive year, to the same level as in 2006. Its ASKs fell during the global financial crisis and have changed little since. Revenue looks likely to have grown in 2015, but is also well below its pre-crisis levels. With only three years of positive operating profit in the decade, Austrian has consistently been the least profitable Lufthansa Group airline.

One of Austrian's big challenges has been to hold on to unit revenue increases when they have occurred. Moreover, its cost base is among the highest in Europe for an airline with its relatively short average trip length. Its short/medium haul focus brings significant competition with LCCs, whose share of the Austrian market has grown over the past decade.

Austrian can take some heart from an improved profit margin in 9M2015, which should presage a stronger FY2015 result (to be published by Lufthansa on 17-Mar-2016). In addition, the Group has established a base for its growing LCC Eurowings at Austrian's hub in Vienna, the no-frills subsidiary's only base outside Germany.

Lufthansa: 2016 staff recruitment plans indicate strategic intentions. Eurowings and SWISS to grow

8-Jan-2016 5:14 PM

Lufthansa made a big announcement recently concerning the group's hiring plans for 2016. The statement said that the Lufthansa Group will recruit more than 4,000 new employees in 2016, "giving the organisation a top position among the leading German companies". It is relatively unusual for the Group to issue a press release of this nature about its hiring plans and, for this reason, it deserves some attention.

Scratching beneath the surface, the statement reveals much about the Lufthansa Group's planned strategic development in 2016 and beyond. This year will experience a significant step up in its capacity growth, but this growth will not be shared equally by all of the Group's airlines. LCC subsidiary Eurowings is the preferred growth vehicle, and SWISS is also in favour. Frankfurt's dominance may be eroded somewhat in favour of Munich.

Moreover, Lufthansa makes it clear that new cabin crew will be recruited on contracts with a significant part time element. This, together with the development of Eurowings, signals management's determination to drag the Lufthansa Group into an era of greater labour flexibility and cost efficiency.

Western Europe-Iran: opportunity in under-developed market, but Turkish Airlines already has a niche

14-Dec-2015 4:05 PM

Iran accounts for just 5% of Western Europe-Middle East seats, yet it accounts for 24% of the Middle East population. Air travel between Western Europe and Iran fell annually until 2013, since when growth has returned. Nevertheless, it remains under-developed and the thawing of relations with Iran should provide a significant opportunity.

Preliminary 2016 data from OAG indicate that Iran Air's 36% of seats in this market will keep it above Lufthansa's 27%. However, growth by Lufthansa and Austrian, together with the entry of Eurowings, will rank the Lufthansa group ahead with 46%. The other Iranian airline in this market, Mahan Air, is also set to grow rapidly in summer 2016. From the Western European side, the only other operators are Alitalia and Germania.

The potential for the Western Europeans is clear, although it will take time for demand to evolve to levels that are more consistent with the size of Iran's population (second only to Egypt in the Middle East). Moreover, Turkish Airlines has a widespread presence both in Iran and Western Europe and already offers strong competition in the form of one stop services through Istanbul.

Lufthansa, Singapore Airlines respond to Gulf competition with a limited JV. There is scope for more

13-Nov-2015 12:54 PM

The rise of the Gulf carriers continues to pressure airlines that were once formidable individual competitors into joining forces to combat a more effective rival. And so the Lufthansa and Singapore Airlines groups have been forced to compromise their previous independence. One new strategy is to form a revenue sharing joint venture. This method of cooperation is becoming more common between Europe and Asia, having already been established in the trans-Atlantic and trans-Pacific markets. Most JVs were established to enhance a position of strength built on pre-existing solid footing. In comparison, Lufthansa and SIA are setting aside differences in this time of duress to respond to the Gulf carriers that have changed their business profoundly.

Although Lufthansa and SIA account for about 27% of non-stop Western Europe-Southeast Asia capacity, their share of flown passengers is around 13%. Emirates alone has 12%; adding Etihad and Qatar now has 27% of the market transitting via the Gulf. But SIA and Lufthansa are the only airlines operating non-stop service between their respective countries.

Despite the severe situation, perhaps bordering on crisis, the response from Lufthansa and SIA is limited. Their JV will only cover routes from Singapore to Germany (the hub of Lufthansa) and Switzerland (the hub of Swiss). This is only one third of their Europe-Southeast Asia market. Lufthansa and SIA will remain competitors on many other market pairs - and this could become a source of friction, or at least suspicion. A Singapore-London passenger, for example, could go non-stop on SIA outside the JV or via a German/Swiss hub under a JV. Both airline groups will compete for a Kuala Lumpur-Amsterdam passenger.

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This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.