Austrian Airlines set to return to profitability after restructuring

Austrian Airlines set to return to profitability after restructuring

Austria’s flag carrier, Austrian Airlines, has said it will return to a cautious growth path after years of restructuring.

A new pricing model, new medium-haul fleet, new destinations, the expansion of the business as an operating carrier within the Lufthansa Group and a new red-white-red market image comprise the underlying basis.

“The restructuring carried out over the past few years has made us fit again for the challenging aviation market,” said Austrian Airlines chief executive Jaan Albrecht.

“Following the agreement reached with the Works Council, we once again have a good basis and renewed opportunities for growth. We want to take advantage of this.”

Due to the restructuring efforts, Austrian Airlines has worked its way up to emerge as the cost leader within the Lufthansa Group.

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This can also be demonstrated through internal orders.

For example, since the spring of 2015, Austrian Airlines has been operating four Dash8-400 in wet lease on behalf of its sister company SWISS.

The Austrian aircraft have been flying under contract and within the flight network of SWISS, but are staffed by Austrian Airlines crews.

Austrian Airlines also operates an aircraft for Lufthansa in wet lease and expects further growth impetus, especially in this business segment.

This year, two Airbus A320 are to be operated by Austrian Airlines personnel on behalf of the sister company, Eurowings.

“We anticipate growth in passenger volume, revenue and the total number of our employees during the upcoming three to five years,” stated Austrian Airlines chief financial officer Heinz Lachinger.

Business targets foresee an increase of about ten percent in the airline’s core and additional business as an operating carrier.

In absolute terms, Austrian Airlines expects 1.5 million passengers, 400 jobs and a revenue increase of EUR210 million within the next years.

“However, we will continually keep an eye on costs and profitability,” Lachinger added.

New Pricing

Austrian Airlines is launching its new pricing concept for Austrian and European flight traffic in the fall of 2015.

Passengers will be given more options when it comes to additional choices.

For example, DO&CO à la carte meals, lounge access, additional luggage or other services can be individually booked regardless of the air fare category.

This means a passenger will be able to individually design their particular flight.

Accordingly, Austrian Airlines includes a “my” before its brand name.

“The name ‘myAustrian’ should signal to our customers that we aim to put greater emphasis in the future on accommodating individual product wishes.

“At the same time, we want to strengthen the identification of our employees and customers with “their” airline,” said Austrian Airlines chief commercial officer Andreas Otto.