Austrian Airlines is consistently implementing its concept for the restructuring of the company – ‘Austrian Next Generation’. The concept is based on two pillars: measures aimed at cost reduction, and a new market strategy.

With its comprehensive cost-reduction measures, Austrian Airlines is bringing its costs down to a competitive level. This strategy provides the company with the room for manoeuvre necessary for a new, active market strategy. Austrian Airlines has set itself the goal of using this new market strategy to increase the number of passengers it carries on scheduled flights with the summer schedule 2010 by around 1 million per year. Certainly we will of course comply with the Commitments of the European Commission in the state aid decision to the ASK reduction.

Austrian Airlines will implement its new market strategy across-the-board at the beginning of this year’s summer schedule. We shall be offering our customers an improved product at attractive prices by deploying larger aircraft, providing more frequencies on key connections and developing additional new services – and all at competitive, attractive prices.
The Members of the Executive Board at Austrian, Andreas Bierwirth and Peter Malanik, said the following: “We are improving our product where it is relevant to the clients. It is all about providing clients with concrete arguments as to why they should be flying with Austrian.”

Here are those new measures in detail:

• Larger aircraft
We are removing almost all the aircraft in our 50-seater fleet from operation, and replacing them with larger aircraft. Doing this will enable us to reduce our unit costs and offer customers more comfort. On important routes with high passenger volume – which encompasses a total of around 50 connections in Europe – we will be deploying our Boeing and Airbus aircraft in greater numbers.

Some examples of this strategy: Instead of using a Fokker 100 on the route to Sarajevo, we shall be flying an Airbus 321. Instead of a Fokker 70 we will now be using an Airbus 319 to Tbilisi. Rather than flying a Fokker 100 on the route to Zurich, we will be using a Boeing 737-800, an Airbus 319 and an Airbus 320. We are using a Boeing 737-700 on the route to Milan instead of a CRJ and a Fokker, and the evening flight to Barcelona will no longer be on the Fokker 100 in future, but on a Boeing 737-800.

• More flights
We will be increasing the number of frequencies on routes with particularly high levels of passenger volume. Some examples:
* On the Vienna-London route, we shall be increasing the number of flights we provide from 28 to 35 a week, together with our Group sister company, bmi
* On the Vienna-Brussels route, we shall be offering 46 flights a week instead of the 32 to date, together with our other Group sister company, Brussels Airlines
* We will be increasing the number of frequencies we provide on the Vienna-Zurich route, from 53 to 55 a week
* We will be increasing the number of flights we provide on the Vienna-Zurich route, from 19 to 21 a week
* We will be increasing the number of flights we provide on the Vienna-Prague route, from 30 to 32 a week

In total, Austrian Airlines will offer its clients 2,080 flights a week in the 2010 Summer Schedule together with its partners, compared to 2,055 in the 2009 Summer Schedule. We shall be operating 1,513 of these flights ourselves. Last year, we operated 1,499 flights ourselves. We fly to 130 different destinations in 57 countries. In the 2009 Summer Schedule, we served 137 destinations in 59 countries.

• Attractive prices
Our cost reduction programme and the strategy of using larger aircraft will improve our cost structure. As a result, we are now in a position to act more flexibly with our pricing, and can also offer redticket flights at prices starting below 99 euros. Current examples include the following: we are already offering flights to Hamburg, Berlin and Milan from as little as 59 euros with the Summer Schedule. We offer flights to Dusseldorf, Barcelona, Cologne, Nice, Paris, Rome, Sofia, Stockholm and Stuttgart from 69 euros. Copenhagen, Munich and Bucharest are available from 79 euros. Flights to Frankfurt start at 89 Euros. Services to Zurich, Innsbruck and Moscow are available from 99 euros. These ticket prices include the outbound and return flights, and all taxes and charges. At this price, the client receives 20 kilograms’ baggage allowance, an inflight snack and mileage with the European largest frequent flyer programme, Miles & More. In addition to these very reasonably-priced tickets, of course, we offer tickets at different prices because they offer even more service. Examples of this extra service include more baggage allowance, the option to rebook the ticket, access to Lounges and a host of other comforts.

• New services
The Austrian product management team is currently working around the clock to develop innovative new products and services, which we will gradually be introducing to the market. Some examples:
* The new Austrian website went online two weeks ago at www.austrian.com. The new layout is quick and easy to use. With just one click, the customer is taken to four central themes: Booking, Web-Check-in, Air Manager and Rebooking. The redticket box leads directly from the homepage to the lowest-priced tickets.
* Austrian redup: Austrian Airlines passengers with Economy tickets now enjoy the option to decide at short notice to fly Business Class when checking in online. Austrian Airlines has pioneered the provision of this service within Europe. 
* Austrian redlounge: In future we shall offer the passenger the opportunity to pay for access to the Lounge, even with an Economy ticket.
* Austrian red-XL-bag: We are planning to offer the passenger the opportunity to buy a voucher for excess baggage at the time of making his booking.

• Very high punctuality
Austrian Airlines is one of the most punctual airlines in the world. In 2009, with an arrival punctuality figure of 89.9 percent, Austrian Airlines was the second most punctual of all 23 AEA airlines, and significantly (7.4 percentage points) above the AEA average. We want to retain this outstanding position amongst the leading players in the industry. The same is true of our first-class service and excellent catering: we shall continue to cultivate the high level of quality we offer in this area: Austrian remains Austrian.

Group Sales
With all these measures, we want to achieve our aim of significantly increasing the number of passengers we carry in our core segment of scheduled services. Our newly set-up Sales team will also make a contribution to doing this. Internationally, we shall use the sales strength of Lufthansa in Western Europe and on intercontinental routes. In Austria, many markets in Central and Eastern Europe and some countries in the Middle East, we have the sales lead for Lufthansa Group. These countries include Albania, Armenia, Bosnia, Iraq, Kosovo, Moldova, Serbia, Slovakia, Slovenia, Syria and the Czech Republic.