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Austrian Airlines is the national airline of Austria and is based at Vienna International Airport. Along with its regional subsidiary, Tyrolean Airways, and charter arm, Lauda Air, the carrier operates both domestic and international networks, particularly to Eastern Europe and the Middle East.
On 1-Jul-2012, as part of its restructuring and cost reduction programme, Austrian transferred all of its mainline services to Tyrolean. At least 110 pilots refused the transfer, accepting instead very generous redundancy terms. The carrier continues to operate under the Austrian Airlines AOC and under the Austrian brand.
Austrian Airlines is a member of the Star Alliance.
Location of Austrian Airlines main hub (Vienna International Airport)
718 total articles
53 total articles
Etihad's announcement that it was buying 33.3% of Switzerland-based Darwin Airline was made on the first day of the Dubai Airshow and was easily lost in the fury of orders announced that day.
Darwin only flies aircraft with 50 seats, less than the number of premium seats that will be on many of the 350-plus widebody aircraft Gulf carriers ordered at the airshow. But the announcement is significant, and three reasons stand out.
First, for Etihad the carrier will "connect the dots" in Europe for itself and partners, linking hubs but also tertiary cities, which have largely been passed over by Gulf carriers. Many of these cities are served by the Lufthansa Group. This gives rise to the second significant impact: on Europe's legacy carriers. Gulf carriers changed their long-haul business while European LCCs decimated short-haul. Regional traffic was always typically a burden, and will come under further pressure following Etihad's announcement. Third is that Darwin Airline will re-brand as "Etihad Regional", and Etihad openly states Darwin is only the first carrier to use this new brand. As the industry still digests Etihad's partnership and equity strategy, Etihad promises to change another component of aviation – and raise the stakes in the liberalisation of the industry, especially by stamping its name on a European carrier.
Lufthansa’s 3Q2013 profit numbers all fall, but there is ‘clear improvement’: how to understand this
Lufthansa does not make it easy for the casual observer to understand its financial results. It has three different figures for what is generally called operating profit: ‘EBIT’, ‘operating result’ and ‘normalised operating result’, plus a fourth indicator, ‘adjusted operating margin’. Here is how we paraphrase Lufthansa’s 3Q2013 results communications.
“Underlying profitability is moving in the right direction, in spite of weak currency-affected yields. The SCORE restructuring programme is starting to have a positive effect, but is also bringing one-off costs. The transfer to Germanwings should lead to a profit in short-haul for the first time in five years and Austrian should report an operating profit for the first time since we bought it. Our 2013 operating profit should be EUR600 million to EUR700 million and SCORE should take us to our 2015 target operating profit of EUR2.3 billion. We should have a better view next year, when restructuring and product improvement costs reduce, but our recent aircraft order shows our confidence in the future. Trust us for now”.
Lufthansa chairman and CEO Christoph Franz told Bloomberg (9-Oct-2013) that his airline is in discussions with Star alliance partner Air China over a possible commercial joint venture to allow for better connections between Europe and China: “In the future, we will not only link our mutual hubs, but it will be important to also have direct links between major European markets and Air China’s hubs, and the other way round.”
China is an important market for Lufthansa, which already operates joint ventures with partners on routes to North America and Japan. It has a long history of collaboration with Air China in various forms, albeit often with an underlying competitive tension. A new JV would require the two to align their goals in the Europe-China market and could bring the portion of Lufthansa’s ASKs operated under such partnerships close to one half.
On 30-Sep-2013, Austrian Airlines (AUA) celebrated its 56th anniversary of commencing operations in 1957. It also recently passed its biennial Star Alliance audit with what it said were the best results in its history and its parent Lufthansa confirmed that it expects it to return to profit in 2013 for the first time since 2007.
But looking beneath the surface of this birthday re-spray, there might just be some wrinkles on its skin.
A Sep-2013 court ruling questions the legality of AUA’s 2012 transfer of flight operations to its Tyrolean Airways subsidiary. AUA is appealing the decision and the transfer remains effective pending the outcome. This radical move, aimed at lowering staff costs, was part of the vital restructuring necessary to restore profitability. Some two weeks after this court ruling, Lufthansa announced a major widebody order that did not include aircraft for AUA.
The two events may not be directly related, but serve as a reminder that the success of AUA’s restructuring must surely be a pre-condition for any major additions to its fleet.
Lufthansa’s order for Airbus A350 and Boeing 777X aircraft is a reminder that it is still a major long-haul carrier and that there are two manufacturers. In Feb-2013, Lufthansa ordered 100 A320 family aircraft, signalling an eventual move to an all-Airbus short-haul fleet. Since then, its transfer of short/medium-haul non-hub traffic to Germanwings has been a major focus and rival IAG has also announced significant orders. Lufthansa has now restored its position as Europe’s leading buyer of widebodies, adding to the pressure on Air France-KLM in particular.
On 19-Sep-2013, Lufthansa announced the purchase of 59 new long-haul aircraft for delivery between 2016 and 2025, consisting of 34 Boeing 777-9Xs and 25 Airbus A350-900s. It also negotiated options and purchase rights for an additional 30 of each type. The order will allow it to replace its older widebodies and to pursue modest long-haul growth from 2016. Multi-billion dollar orders are not without risk, but Lufthansa’s cautious approach, together with its balance sheet and track record of cash generation, should help to secure financing.
In a somewhat confusing earnings release on 2-Aug-2013, Lufthansa said that its ‘normalised’ 2Q2013 operating result had improved by EUR169 million year-on-year to reach EUR438 million, although its reported operating result declined by EUR163 million to EUR431 million. The passenger segment (and each of its three component airlines Lufthansa, SWISS and Austrian), the logistics segment and MRO all saw improvements in their underlying operating results.
The SCORE profit improvement programme, which aims at improving the annual operating result by EUR1.5 billion from 2011 to give a result of EUR2.3 billion in 2015, is now into its second year. There have already been a number of high profile initiatives, most notably ‘new Germanwings’ taking on Lufthansa’s short/medium-haul non-hub traffic. However, there is still a sense of it being a ‘work in progress’ and Lufthansa’s unchanged FY2013 target to achieve an operating profit above last year’s reported figure of EUR524 million leaves much ground still to be covered.
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