Austrian Airlines: a perennial loss-maker undergoing radical restructuring
Austrian Airlines has not made an operating profit since 2007 and has been consistently the weakest Lufthansa Group carrier in terms of margins and passenger growth. It is more exposed than its sister companies to short/medium-haul markets, where price-based competition is fierce, and its long-haul network is relatively light.
However, it has strong market positions on its long-haul routes and is looking to grow this area of its business with an additional Boeing 777, approved by the parent company. Moreover, its recently completed rationalisation of its narrowbody fleet from 11 Boeing 737s to seven Airbus A320 family aircraft will both reduce its exposure to short/medium-haul markets and allow it to serve them more efficiently.
Meanwhile, the centre-piece of its radical restructuring programme, the transfer of flight operations into its regional subsidiary Tyrolean Airways (effective from Jul-2012), and the concentration of administrative operations at Vienna should lead to further cost savings if legal challenges can be repelled.
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