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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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1,183 total articles

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74 total articles

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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.

IAG again beats Lufthansa & Air France-KLM in 3Q2015, but unit revenue is weak

4-Nov-2015 7:10 PM

Results for 3Q2015 again demonstrated IAG's superior profitability compared with rivals Air France-KLM and the Lufthansa group. IAG's 3Q operating margin of 18.5% was around 6ppts higher than those of the other two. However, all three enjoyed sharp year on year improvements in profits, mainly thanks to lower fuel prices. Both IAG and Lufthansa raised their FY2015 profit targets, but Air France-KLM has not gained sufficient confidence to set a target for the year, in spite of posting the greatest increase in operating profit in 3Q.

The unit revenue environment continued to be weak for Europe's big three legacy airline groups, although it improved slightly in 3Q2015 relative to 2Q. This weakness partly reflects a hazy economic outlook and partly reflects strong levels of competition, particularly on routes to emerging markets. Unit revenue weakness is also a function of management decisions on capacity growth. On the North Atlantic, where capacity growth is tightly contained and competition is less fierce, unit revenue weakness has been more limited.

US-Gulf airline dispute - Europe Part 2: market share in dispute. Does anyone "own" the passenger?

24-Sep-2015 6:17 PM

This is Part 2 of a report reviewing European airline comments filed in the US-Gulf airline dispute. This instalment examines AF-KLM and Lufthansa's supposed claims of damage from Gulf carriers: a long list of statistics about market share and closed destinations. Some imagination has been applied here. For example Lufthansa attributes its 1995 exit from the Sydney route on Gulf carriers-  despite the first Gulf carrier not arriving in Australia until 1996; Lufthansa and Swiss cite closed destinations ranging from Busan to Monastir despite their not having service from the Gulf airlnes.

AF-KLM notes Gulf carriers have gained market share in Europe, but AF-KLM fails to note its own internal cost challenges, along with the impact of LCCs, that have seen it decline in parts of the world while IAG and Lufthansa grow. AF-KLM argues it suffered damage from two fewer Bangkok frequencies – despite KLM's up-gauging which produced 12% growth for the group. Lufthansa says "there is no evidence that the Gulf carriers meaningfully stimulate market growth". But Western European visitors to Bangkok are up 9.6% partially due to Gulf carriers, which are also stimulating growth from Africa and the Middle East.

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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.

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.