Austrian has announced plans to reposition the airline in order to “survive the brutal competition of the low-cost airlines”.
The carrier said that the “glut” of low-cost airlines at Vienna airport meant that a “price war is raging”, and as a result Austrian will “bundle its fleet strength in Vienna”, by stationing all of its available aircraft in the capital.
It means that flights to Germany from Austria’s regional airports will be gradually taken over and operated by sister carrier Lufthansa, with the Salzburg-Frankfurt route switching to Lufthansa from next month.
Low-cost carriers Easyjet and Wizz Air both have a considerable presence at Vienna airport, as does Ryanair-owned Lauda, and IAG subsidiary carrier Level launched a short-haul spin-off last year, initially operating out of Vienna to 14 European destinations.
Austrian said that after six profitable years “the airline could once again find itself in a loss-making situation again due to the cheap flight offerings in Vienna”.
Efficiency and productivity cost cutting measures will aim to reduce in-house costs by €90 million per year from 2021, and some 700-800 jobs will be lost, although the airline says that “a large number of these job cutbacks will be absorbed via staff fluctuation”.
In a defiant message Austrian’s CCO Andreas Otto said that the carrier “will not retreat a single millimetre on the Viennese market”.
The airline is currently undergoing a fleet upgrade programme “in order to defend its hub in Vienna”, with turboprop aircraft set to be phased out by 2021 in favour of A320 jets.
“The replacement of the aircraft and the closer cooperation with our sister company Eurowings enables us to bundle our fleet strength in Vienna”, said Otto. “We will not retreat a single millimeter and will maintain our premium strategy.”
From January Lufthansa Group carrier Eurowings will operate four aircraft from Vienna on a wet lease basis on behalf of Austrian. The airline said that the move will enable the two airlines “to more closely coordinate their route offerings, enabling new direct flights to Barcelona, Birmingham, Nuremberg, Rome and Zadar to be added to the Austrian Airlines portfolio of destinations in its flight schedule”.
The carrier’s first route to Birmingham was announced last month, with a four times weekly service beginning on January 1, rising to daily in summer 2020.
Austrian will also drop its summer seasonal route to Miami, which is “no longer profitable despite all efforts made by the airline”, and its seasonal service between Vienna and LA (launched in 2017) will be reduced from daily to five flights per week next summer.
Commenting on the news CEO Alexis von Hoensbroech said:
“Our long-term strategy remains in full force. We want to modernize Austrian Airlines and make it profitable and investment-ready.
“Investment-ready means that the company will able to finance the necessary investments on its own”.