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7JetSet7 Code: AUL
Status: Operational
Region: EUROPE
Country: AUSTRIA
Employees 10530
Telephone: +43 5 1766 0
Fax: +43 1 6886 526

Click below for data links:
AUL-2004-02-NEWS-1ST A319
AUL-2005-05-A-2004 PROFITS
AUL-2005-06-A-RNP RNAV
AUL-2017-10 - Vienna to Mahe, Seychelles.jpg
AUL-2018-04 New Livery See 777.jpg
AUL-Salzburg Airport - 2018-02.jpg




Austria was established in 1918, covers an area of 83,856 sq km, its capital city is Vienna, it has a population of 8.5 million, and the official language is German.


1994 = -$20.8 MILLION: +6.3% (RPK) TRAFFIC, -4.2% PASSENGERS (PAX), +10.9% (FTK) FREIGHT TRAFFIC.


MARCH 1995: 2 A340-200'S (CFM56-5C2G) DELIVERIES.






+3/3 F 70'S & +2 A340'S DELIVERIES. 1 A321-100 (CFM56-5B1/2) DELIVERY.



F 70 (TAY 620-15) & A340-300 (CFM56-5C4) DELIVERIES. 2 ORDERS (APRIL 1997) A340-300'S. RECENTLY, ALSO ORDERED 2 A340-200'S.

APRIL 1996: FY 1995 = +#55.1 MILLION SCH/+$6 MILLION (-#202.3 MILLION SCH): 2.75 MILLION PASSENGERS (PAX) +7.1% PAX, +13% CHARTER (PAX); 59.7% LF LOAD FACTOR (-2).







4 ORDERS A330-300'S (PW4168).

FEBRUARY 1997: 1 ORDER (JANUARY 1999) A330-200.



FISCAL YEAR (FY) 1996 = +$8.5 MILLION.



SEPTEMBER 1997: 1 F 70 (11528) DELIVERY .






JANUARY 1998: 1997 = +$52 MILLION.


1ST A320-214 (768) DELIVERY (2ND IN FEBRUARY 1998).


A320-214 (776).




1 A320-214 (797) DELIVERY.

APRIL 1998: FISCAL YEAR (FY) 1997 = +$10.5 MILLION: 3.93 MILLION PASSENGERS (PAX) (+11.7%), 65.3% LF (+6.6) HIGHEST IN 40 YEAR HISTORY!






1ST A330-200 (PW4168A) DELIVERY.


FISCAL YEAR (FY) 1997 = +$8.75 MILLION.


DECEMBER 1998: 6 ORDERS (MARCH 2001) A320'S & 1 ORDER (MARCH 2001) A321. 2 A321-211'S (920; 935) DELIVERIES.

MARCH 1999: A340-300X (CFM56-5C4) DELIVERY.

APRIL 1999: 4,379 EMPLOYEES. (


1998 (AUA) GROUP = +$100 MILLION (+$48 MILLION).


MAY 1999: A330-223 (195, OE-LAN "ARLBERG") DELIVERY.





2 MD-81'S (48017; 48021) TO SPIRIT (SPR) (2ND & 3RD). +2 (49115; 49164) IN 4TH QUARTER 2000.





FEBRUARY 2000: A320-214 (1150, OE-LBR) & A330-223 (317, OE-LAP "SEMMERING") DELIVERIES.

MARCH 2000: 1999 = 7.92 BILLION (RPK) TRAFFIC (+8.7%); 214 MILLION (FTK) FREIGHT TRAFFIC (+33.6%); 3.49 MILLION PASSENGERS (PAX) (+1.9%).






1999 = +$12.65 MILLION (+$69 MILLION): 7.89 BILLION (RPK) TRAFFIC (+8.3%); 65.9% LF LOAD FACTOR; 87.04 MILLION (FTK) FREIGHT TRAFFIC (+19.6%); 3.78 MILLION PASSENGERS (PAX) (+2.6%); 5,897 EMPLOYEES.





2 MD-82'S (49115; 49164), SOLD TO SAFAIR (SFA), LEASED TO AIR LIB (ALB).




FEBRUARY 2001: 3 MD-82'S (49278; 49279; 49372), SOLD TO BOEING (TBC) AND LEASED BACK. 1 A320-214 (1387, OE-LBT "WORTHERSEE") DELIVERY.

MARCH 2001: 2000 = 8.80 BILLION (RPK) TRAFFIC (+11.3%), 293.11 MILLION (FTK) (+32.7%), 3.65 MILLION PASSENGERS (PAX) (+4.9%).


1 A321-211 (1458, OE-LBF) DELIVERY. A330-223 (223, OE-LAM), RETURNED FROM ROYAL AIR MAROC (RAM).



2000 = -EUR52.9 MILLION (+EUR42.2 MILLION): +5.2% (RPK) TRAFFIC, 68.2% LF LOAD FACTOR (+1.5). 1ST QUARTER = -$45.6 MILLION: +9.1% PASSENGERS (PAX); +7.7% (FTK) FREIGHT TRAFFIC.




JUNE 2001: 1 A320-214 (1478, OE-LBU "MUHLVIERTER") DELIVERY.




A340-200 (081) WET-LEASED TO PB AIR (PBJ).


JANUARY 2002: 2001 = 16.92 BILLION (RPK) TRAFFIC (-5.2%); 8.55 MILLION PASSENGERS (PAX) (-.1%).

1 UAL 116.60; 2 AAL 106.15; 3 DAL 97.60; 4 NWA 73.11; 5 BAB 64.24; 6 AFA 59.54; 7 CAL 58.76; 8 DLH 56.76; 9 JAL 50.77; 10 USA 45.93; 11 SWA 44.50; 12 SIA 42.76; 13 QAN 42.14; 14 ACN 41.49; 15 KLM 35.76; 16 ANA 33.16; 17 CAT 27.81; 18 TII 27.43; 19 IBE 25.64; 20 KAL 23.73; 21 ALI 22.45; 22 MAS 22.29; 23 AMW 19.06; 24 VAA 17.65; 25 VAR 16.02; 26 CHI 16.00; 27 EAD 14.37; 28 SAS 14.26; 29 ANZ 13.54; 30 SAA 12.70; 31 SVA 12.56; 32 BEJ 12.39; 33 ASA 12.23; 34 JAS 10.06; 35 THY 9.35; 36 AMX 8.51; 37 PAL 8.36; 38 GIA 8.15; 39 CMA 7.99; 40 ELA 7.79; 41 GUL 7.65; 42 PIA 7.24; 43 AIN 7.10; 44 TAP 6.43; 45 EGP 5.53; 46 OLY 5.24; 47 AUL 5.06; 48 FIN 4.93; 49 IND 4.52; 50 CQT 4.51.








APRIL 2002: 7,700 EMPLOYEES.



May 2002: 5th anniversary of Star Alliance (SAL): (ACN); (ANZ); (AUL); (BMA); (CMA); (DLH); (LAL); (SAS); (SIA); (TII); Tyrolean; (UAL); & VAR).

July 2002: 2001 AUSTRIAN AIRLINES GROUP = -$146.08 MILLION (-$46.55 MILLION): 8.14 BILLION (RPK) TRAFFIC (-7.5%); 63.4% LF LOAD FACTOR; 3.61 MILLION PASSENGERS (PAX) (-1.2%); 252.41 MILLION (FTK) FREIGHT TRAFFIC (-11.3%); 7,700 EMPLOYEES (+0.4%).


August 2002: In October 2002 to Malaga (A320, weekly).

1st 6 months Austrian Airlines Group pre-tax = +EUR4.3 Million/+$4.2 Million (-EUR70.2 Million): due to +1.4% gain in flight revenue, a reduction in long-haul capacity in favor of shorter services with higher yields, and the slide of the $ against the EURO.

Switches an order for 6 A320's to A319's.

Austrian Airlines (AUL) Maintenance Operations - Maintenance, Repair & Overhaul (MRO) contact: ( SITA: VIEMSOS.

September 2002: 1 order (February 2006) A319-100.

October 2002: Converted orders from 6 A320-200's to the smaller A319-100's.

November 2002: In December 2002, Lauda Air (LAL) to New York (JFK) for Austrian Airlines (AUL) (767-300ER).

Leases its 2 A340-211's to Lufthansa (DLH) for the winter season.

December 2002: Austrian Airlines Group completed its programmed elimination of -968 personnel since January 2002, trimming its payroll to 7,500. Mostly achieved through attrition, fluctuation, and part-time jobs, with only about -150 having to leave the company involuntarily.

Maintenance & Engineering management of Austrian Airlines (AUL) and Lauda Air (LAL) has been consolidated under one Austrian Airlines Group management.

Selects Aircraft Maintenance Operations System (AMOS) integrated software to maintain its fleet records. The (AMOS) software was developed by a Swiss company in direct online communication with airline maintenance and engineering. Data records including airplane hours, cycles, reliability, spares, warranty, condition monitoring, finances, etc.

January 2003: Austrian Airlines Group 2002 = 8.83 million passengers (PAX) (+3.3%): including 7.26 million (+1.2%) on scheduled flights and 1.56 million (+14%) on charter flights.

February 2002: With Europe facing possible conflict with the Middle East, it has caused a "clear fall in demand" reflected in relatively low pre-bookings for 1st Quarter 2003, thus Austrian Airlines (AUL) said it will not achieve its forecast net profit for 2002 = +$ EUR 45 million/+$48.2 million. Actual 2002 Austrian Airlines Group = +EUR 42.6 million/+$45.8 million (-EUR 166 million): 17.98 billion (RPK) traffic (+6.3%); 8.83 million passengers (PAX) (+3.3%).

March 2003: In May 2003, code share with Ukraine International (UKR), Lvov - Vienna (737, 4/week).

7,140 employees. SITA: VIETOOB.

Will retire its MD-80's by the end of 2003.

April 2003: Citing "dramatic falls" in passenger business, that it attributed to the Iraq war as well as other economic factors impacting international aviation, Austrian Airlines (AUL) is adopting measures "to effect a lasting cost reduction of -5% across the Group for the full year 2003. Overall production will be reduced by -11%, while about -10% of scheduled flights will be cut in May 2003. 4 airplanes will be grounded until further notice. Another -150 positions in addition to the -930 jobs eliminated last year.

June 2003: 5,370 employees.

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Austrian Airlines Group cost cutting results in termination of 51 pilots (FC) of total 473.

July 2003: SITA: VIETOOB.

The Austrian Airlines Group continues to expand its network in Central & Eastern Europe, and in August 2003, Vienna to Baku (3x-weekly non-stops). Also serves the other Caucasian republics of Georgia and Armenia.

August 2003: Vienna to Sarajevo (A320, daily). In September 2003, Vienna to Bucharest (10x-weekly). In November 2003, round-the-world charter for Astronomy Travel for 154 passenger (A340-313), Vienna to Spitzbergen, Kona, Sydney, Ushuaia, Antofagasta, Lima, Cancun, & return to Vienna, taking in both poles.

September 2003: 5-year, EUR 65 million technical cooperation agreement with Lufthansa Technik (LTK) (DLH), under which both companies will be rendering to each other, maintenance and technical support services. Annual "C" checks of Lufthansa (DLH) A330-200s & A340-300s/-600s will be performed at Austrian Airlines (AUL)'s facilities at Vienna Schwechat airport. Altogether, an average of 25 wide bodies will be flown every year to the (AUL) facility for those 5 days of maintenance.

In return, (LTK) will perform for (AUL) and Lauda Air (LAL) all its heavy maintenance needed every 4 to 5 years on A320s, A330s, & A340s as well as the maintenance of their (PW4000) engines for 767s, & (CFM56) engines for A340s. Some of this work will be done at (LTK)'s facilities in Hamburg, with the rest by its worldwide alliance members, eg (LTK) Philippines, and Shannon Aerospace.

Engaged Landor Associates to produce new brand identity. The word "Airlines" is removed from the fuselage, and the trademark arrow has been enlarged "in a more self-confident manner."

In October 2003, Vienna to Tirana (6/week).

Austrian Airlines Group 2002 = 17.34 billion (RPK) traffic (+4.8%); +2.7% (ASK) capacity; 70% LF load factor (+1.4); 8.8 million passengers (PAX) (+3.3%); 396 million (FTK) freight traffic (+49.4%); 7,358 employees (-7.5%).

38 (EVA) 19.51; 39 (CEA) 18.63; 40 (BRI) 18.43; 41 (ARO) 17.65; 42 (CDF) 17.41; 43 (AUL) 17.34; 44 (AAR) 17.33; 45 (GIA) 16.72; 46 (THY) 16.59; 47 (ATZ) 16.30; 48 (LTU) 16.10.

October 2003: Code share with Air New Zealand (ANZ) with Lauda Air (LAL), Vienna to Sydney, via Kuala Lumpur, Vienna to London, and selected TransTaman flights from Auckland, Wellington, & Christchurch, to Sydney, and Melbourne.

November 2003: In May 2004, Bratislava to Brussels, Paris and London (LAL) 737-600).

1 An-12, Ukraine International (UKR) wet-leased.

December 2003: In April 2004, Vienna to Montreal (A330-200/A340-300, 2/week), Vienna to Kathmandu (A340-200, weekly). In June 2004, Vienna to Singapore to Melbourne (777 (LAL), 3/week). Vienna to Malta (A320, weekly).

$42 million, +2 orders (February 2005) Dash 8-Q400's to be operated by subsidiary Tyrolean Airways under its new "Austrian Arrows" banner. Tyrolean's fleet consists of: 8 Dash 8-Q400's, 12 Dash 8-Q300's, 13 CRJ-200's, & 6 F 70's.

January 2004: Austrian Airlines Group 2003 = +EUR 45.8 million/+$55.2 million (+7%) (+ EUR 42.8 million/+$40.7 million): 17.97 billion (RPK) traffic (-.1%); 72.4% LF load factor; 8.48 million passengers (PAX) (-4%); 442.55 million (FTK) freight traffic (+4.4%).

Vagn Soerensen, (CEO) succeeds Rod Eddington, British Airways (BAB) (CEO) as Chairman of the Association of European Airlines (AEA) for 2004.

Star Alliance (SAL) Austrian Airlines (AUL) is 1 of 15 members that signed a 5-year Information Technology (IT) accord with (BEA) Systems Inc, San Jose, California, an application infrastructure software firm. The contract gives (SAL)'s 15 members "the opportunity to introduce (BEA)'s innovative application platform suite at a cost no single airline would be able to negotiate" said Michael Stagl, (SAL) (CIO). United Airlines (UAL), Lufthansa (DLH), & Singapore Airlines (SIA), as well as (SAL) itself, have developed ticketing, baggage handling, and loyalty software applications on the (BEA) WebLogic platform in recent years. Under the new agreement, (BEA) WebLogic Server and (BEA) WebLogic Integration become (SAL)'s preferred application server and integration software.

In May 2004, will base 1 737 in Bratislava when it launches daily connections from the Slovakian capital to London, Paris, and Brussels. Has a leading 30% market share in Slovakia.

2 MD-82's (49278; 49372) returned to Boeing Capital (TBC). F 70 (11559, OE-LFO), written off (W/O) at Munich.

February 2004: INCDT: Austrian Airlines (AUL) F 70 (11559, OE-LFO) was forced to make an emergency landing following loss of power nearing the end of a flight from Vienna to Munich. The emergency landing was carried out on a snow-covered field, some 2 nautical miles from the airport, with the landing gear kept in the stowed position. The 4/28 crew/passengers were able to exit the airplane via the normal exit door. Some passengers suffered minor injuries, although the majority were able to keep their business appointments in Munich. The airplane was considered as a write-off (W/O).

Major Austrian Airlines Group shareholder, Credit Suisse First Boston has sold its remaining interest, raising the Group's free float to 43.2%. The airline itself (AUL) has 5%, with the remainder held by Austrian state privatization agency (OLAG) (39.7%), institutional investors (10.6%), and Air France (AFA) (1.5%).

The European Aviation Safety Agency (EASA) certified (AUL)'s Technics Division as 1st (EU)-designated "design organization." This certificate of competence No 001 "confirms that the holder fulfills all the prerequisites to make changes & mods in and on jet airplanes."

A319-112 (2111, OE-LDA) delivery. Will replace 1 MD-82, 2 MD-83's, & 4 MD-87's with F 100's.

March 2004: Airfreight division has new product portfolio with 7 elements: Priority; mail; care; valuable; cool; medical; & standard. Added freighter flights to Singapore and Shanghai.

Code share with Air Canada (ACN), Vienna to Montreal. Code share with Egyptair (EGP), Vienna to Cairo while guaranteeing seats to Africa, Saudi Arabia, and the United Arab Emirates (UAE). Code share with (JAT) Airways, Belgrade to Vienna.

2nd A319-112 (2131) delivery. 9/6 orders F 100's ex-American (AAL) for regional subsidiary, Austrian Arrows operations.

April 2004: With 737 based in Bratislava, in May 2004, Slovakia to London, Paris, and Brussels.

May 2004: Cargo agreement with (EVA) Air to provide approximately 5 tons of capacity/flight in each direction of Vienna to Mumbai to Taipei to Austrian Airlines (AUL) customers (EVA) MD-11F, 74 ton cargo capacity, 3/week).

Code share with SyrianAir (SYR), Aleppo to Damascus. Code share with Royal Air Maroc (RAM), Casablanca to Agadir to Vienna (737, weekly).

June 2004: Amadeus acquires a controlling 55% stake in travel portal Opodo for EUR 62 Million/$74.5 Million in cash. Opodo was created by 9 European network airlines: Aer Lingus (ARL); Air France (AFA); Alitalia (ALI); Austrian Airlines (AUL); British Airways (BAB); Finnair (FIN); Iberia (IBE); (KLM); & Lufthansa (DLH), whose stakes will be reduced in proportion to the investment by Amadeus. The 3 biggest shareholders: (AFA); (BAB) & (DLH) will hold 10.3% each, while the shareholdings of (ARL) & (AUL) will be diluted to 0.51% each. Amadeus, which is majority owned by (AFA); (IBE) & (DLH), said Opodo will continue to operate as a separate company.

Vienna Airport (VIE) is investing EUR 722 million/$866 million in an expansion program that includes a new terminal called SkyLink that should be operational in 2008. The cost of SkyLink, the 1st part of the investment, is around EUR 280 million. The terminal will offer 51 gates including 17 with airbridges, along with 96 check-in counters. With SkyLink and the existing terminal facilities, (VIE) will be able to handle 28 million passengers/year.

Code share with Singapore Airlines (SIA), Vienna to Singapore. (AUL) is looking to extend its long-haul operations and add Mumbai as soon as traffic rights are confirmed. Also looking for additional service to China (Beside Beijing & Shanghai, Hong Kong could be a possibility). Meanwhile (AUL) is evaluating Nagoya as its 3rd destination in Japan. (AUL) also wants to take advantage of Alitalia (ALI)'s weakening position in parts of northern Italy, and Bergamo and Turin should join its network when more airplanes are available.

Star Alliance (SAL): Air Canada (ACN); Air New Zealand (ANZ); All Nippon Airways (ANA); Asiana (AAR); Austrian (AUL); Blue 1 (applicant); bmi (BMA); (LOT) Polish Airlines; Lufthansa (DLH); Scandinavian (SAS); Singapore Airlines (SIA); South African Airways (SAA) (applicant); Spanair (SPP); (TAP) Air Portugal (applicant); Thai Airways (TII); United Airlines (UAL); US Airways (USA); & Varig (VAR).

Code share with Slovak Airlines (SLV), Bratislava to Brussels, London Gatwick (LGW), Paris (CDG).

Will discontinue the Lauda Air (LAL) brand and repaint all its airplanes in Austrian (AUL) livery.

F 100 (11490, OE-LVA), Fokker leased.

July 2004: 4th order (July 2005) 737-800 for its charter unit Lauda Air (LAL). F 100 (11502, OE-LVB), delivery. Would like to sell its 2 A340-200's which are too expensive to operate, but cannot find any buyer.

1 order (July 2005) 737-800 for Lauda Air (LAL) operations. A319-112 (2262, OE-LDC), delivery.

September 2004: Has extended its same-day return services from Vienna to 40 European destinations. Business travelers can spend a workday in 32 Western European cities and 8 in Eastern/Central Europe and return to Vienna the same evening.

Resumed Vienna to Kathmandu (2/week).

Malev (HGA) will be privatized this fall, with bids due by 10/20/04, but finding an investor may be difficult. Potential bidders include Hainan Airlines (HNA) (interested in acquiring 100%), in which Hungarian-born billionaire, George Soros holds a key investment, Austrian Airlines (AUL); and the Air France (AFA)/(KLM) consortium. Later, (AUL) dropped out of the bidding and said it was no longer interested.

October 2004: Plans network expansion to North Africa and the Middle East. Benghazi will become the 2nd destination in Libya. Alexandria will see 4x-weekly services to Vienna by summer. When the security situation allows, also expects to re-launch services to Baghdad (3x-weekly). Code share with Macedonian Airlines (MCC), Skopje to Vienna, & Ohrid to Vienna.

The Austrian Airlines Group extended EUR 5 Million in credit to Slovak Airlines (SLV), in which it plans to take a majority stake.

Will hire +400 flight attendants (CA) through the end of 2004.

November 2004: Standardized on an enterprise business intelligence solution from Cognos. Key to the deployment's success has been Cognos ReportNet's ability to interoperate easily with Austrian Airlines (AUL)'s SAP Business Information Warehouse.

In March 2005, Vienna to Naples (3x-weekly). Is looking at growth opportunities in Eastern & Central Europe, including Sibiu & Jasi in Romania, Tjumen & Ufa in Russia, and Plovidiv & Varna in Bulgaria.

Wants to boost its stake in Ukraine International (UKR) from 22.5% to 49%.

January 2005: Austrian Airlines Group took a 62% stake in Slovak Airlines (SLV) through an investment of EUR 2.8 million/$3.6 million. The remaining 38% is in the hands of the Slovakian government.

(SLV) may take over the Bratislava to Brussels route from Austrian Airlines (AUL).

Austrian Airlines Group 2004 = + EUR 40.2 million (+ EUR 45.8 million): 21.3 billion (RPK) traffic (+18.4%); +17.8% (ASK) capacity; 72.8% LF load factor (+.4); 9.4 million passengers (PAX) (+10.9%). Projects +8% (ASK)'s capacity for 2005.

In 2005, will phase out its 2 MD-80's, but plans to add 2 737-800's, 3 A319's, 6 F 100's & 2 Dash 8-Q400's.

February 2005: To cut -10%, mainly -1,000 administartive & service personnel to save EUR 3 million/$3.9 million, but will hire +50 pilots (FC) & +400 flight attendants (CA).

Vienna to Varna, Bulgaria (5x-weekly). Cooperation with Tarom (TRM), Vienna to Sibiu, Romania.

March 2005: A319-112 (2416) delivery.

April 2005: Selects Lufthansa (DLH) Systems e-ticketing solution. Also to use its NetLine/Sched modules Slot Manager and Slot Monitor with implementation set for this summer.

737-8Z9 (33833, OE-LNR), delivery.

May 2005: 5,163 employees.

Jointly opened a hub control center with Vienna Airport to secure their position as an East/West transfer point. Will employ 28. Vienna handles 50% to 60% of (AUL) passengers.

In 6/05, code share with Royal Jordanian Airlines (RJA), Vienna to Amman. In 8/05, code share with Bulgaria Air (LZB), Vienna to Varna (daily).

June 2005: Selects "Connexion by Boeing" for a customer high-speed Internet service on its long-haul fleet. The agreement calls for initial installation on 4 767's & 3 777's beginning early next year.

Retired its last MD-83, marking the end of service of this airplane type which has served Austrian Airlines (AUL) for the last 25 years.

2 MD-83's (49933; 53377), withdrawn from use (WFU). A319-112 (2494, OE-LDE), delivery.

July 2005: Austrian Airlines (AUL) is interested in acquiring the remaining (38%) shares in Slovak Airlines (SLV).

+5x-weekly flights Vienna to Gothenburg for total 12x-weekly. Offers 150x-weekly flights, Vienna to Scandinavian cities.

August 2005: 5,163 employees.

Austrian Airlines (AUL) will launch weekly seasonal 737-600 service from Innsbruck to Moscow and to Warsaw in December. (AUL) also will operate 3x-weekly services to London from Innsbruck in the winter season. It will transfer its remaining Vienna to Ljubljana services to code share partner Adria Airways (ADR) with the beginning of the winter schedule.

A319-112 (2547, OE-LDF), delivery.

September 2005: Austrian Airlines (AUL) and Thai Airways (TII) have started interlining with e-tickets.

October 2005: Vagn Soerensen, who has led Austrian Airlines (AUL) Group (AAG) as (CEO) since the fall of 2001 and embarked on a broad expansion into Central and Eastern Europe and Asia, announced Monday he will not seek to renew his contract when the current term expires at the end of September 2006. Soerensen cited the desire to return to his native Denmark after spending some 20 years away from his homeland.

The news came as (AUL) reported that net profit for the 3rd quarter ended September 30 fell -83.5% to €7.8 million/$9.3 million from €47.7 million in the year-ago period, while profit from operating activities dropped -73.7% to €15.4 million from €58.5 million. (EBIT) adjusted for airplane sales and currency effects declined -20% to €26.8 million from €33.5 million.

(AAG) said it expects to see "a distinctly negative adjusted (EBIT) for the year as a whole due to the challenging background conditions," including the dramatic rise in fuel prices. In 2004, the company had adjusted (EBIT) of €10.5 million. Soerensen previously said that (AAG) plans to lease out some of its 100 airplanes and may provide some of its 120 737 pilots (FC) to Jet Airways (JPL) for a 5-month period starting from October.

Austrian Airlines (AUL) Technical Center Bratislava, founded in September, will commence "C" checks on F70s/F100s and CRJs in the November to December time frame. The facility employs 30 and eventually will perform Maintenance Repair & Overhaul (MRO) services for (AUL) partner Slovak Air (SLV) and 3rd parties. "We believe that more carriers that operate Fokker jets will be looking for some maintenance alternatives," (CFO) Thomas Kleibl said. He added that (AUL) will support its partner Ukraine International Airlines (UKR) in opening a Boeing maintenance center in Kiev.

(AUL) will add a 4th 777-200ER to its fleet by December 2006. "This airplane is a 1st replacement for our 2 A340-200s we just sold. And we can use the 777 as a backup for our Australia operations and as well when there is a need for higher capacity to destinations like Delhi or Bangkok," (CEO) Vagn Soerensen said. In an effort at further streamlining, (AUL) plans also to sell its last 737-600 and 3 CRJ100s. (AUL), as previously reported, ordered a 777-200ER for delivery in late 2006, Boeing confirmed. The 777 is valued at $181 million at list prices. At the same time, (AUL) canceled a previous order for a 737. Engine selection for the 777 was not announced, but Austrian (AUL)'s 3 in-service 777s are powered by (GE90)s.

(AUL) has signed a contract to sell 2 A340-211's (075; 081) to a consortium formed by Ingepar of France and (TAP) Portugal (as maintenance provider), as part of its fleet harmonization.

November 2005: AirBaltic (BAU) and Austrian Airlines (AUL) will code share flights between Riga and Vienna from November 14. The airlines will combine to offer 11x-weekly flights. Previous agreements between the carriers were cancelled in 2002 over a frequency dispute.

All Nippon Airways (ANA) will move into the new South Wing of Narita Airport Terminal 1 in June 2006, along with fellow Star (SAL) Alliance members Air Canada (ACN), Asiana Airlines (AAR), Austrian Airlines (AUL), Lufthansa (DLH), Scandinavian Airlines (SAS), Singapore Airlines (SIA), Thai International (TII), United Airlines (UAL), and Varig (VAR).

(AUL) will inaugurate non-stop service from Vienna to Ekaterinburg (Russia) on March 27th. (AUL) will operate 3x-weekly, on Monday/Wednesday/Friday, with a 737-700. (AUL) will inaugurate non-stop service from Vienna to Odessa (Ukraine) on March 28th. Austrian Arrows will operate 2 flights on Tuesday/Thursday with a Fokker 70, while (AUL) will operate a Sunday flight using the 737-700.

Austrian (AUL) Cargo will increased its Vienna to Kiev flights to 4x- weekly from November 6 aboard Antonov 12s leased from Ukraine International Airlines (UKR).

December 2005: Flughafen Wien, which operates Vienna Airport, has purchased through its (VIE) Malta subsidiary >5% of Malta Airport from the Maltese government. No information was released about the size of the stake. Flughafen Wien already owns 57% of a 4-member consortium that controls 40% of Malta Airport.

The (AUL) Group officially began the search for a new (CEO) to replace Vagn Soerensen, who announced that he will leave the company by September 2006. Application deadline is January 9.

(AUL) introduced the United Airlines (UAL) Corporate Solutions system in North America for tracking and managing corporate sales and contract information and communication with customers. New Mexico-based Prism Group provides the technology for the system. Frontier Airlines (FRO) is deploying a similar system also using Prism technology.

The European Commission (EC) took Austria, Belgium, Luxembourg and Sweden to the European Court of Justice and sent a "reasoned opinion" to Slovakia for failure to comply with legislation on air passenger rights. "We are determined to ensure that the rights of European passengers are dealt with effectively in all the member states," stated (EC) VP for Transport Jacques Barrot.

The European Union (EU) regulation, which entered into force on February 17, 2004, stipulates that member states must establish an effective system of penalties vis-a-vis airlines that infringe on the provisions regarding additional protection of air passengers. To date, Austria, Belgium, Luxembourg and Sweden have not established rules on the penalties applicable to infringements despite "several" reminders from the (EC). Slovakia has not yet provided the (EC) with the requisite information on the setting of sanctions.

Separately, the (EC) said it sent a reasoned opinion, the last step before a formal complaint is lodged to the Court of Justice, to Greece for failure to respect (EU) legislation on the establishment of a national supervisory authority in the context of the Single European Sky (SES). The European regulation, which entered into force in April 2004, sets up the institutional framework for the (SES). It requires separation between the provision of air navigation services on the one hand and the supervision and regulation of these services on the other. Greece has failed to establish an independent national supervisory authority to assume the tasks identified by the legislation including certification of air navigation service providers and ongoing compliance oversight.

Also, the (EC) confirmed it will take Latvia to the Court of Justice for failing to introduce European legislation on the introduction of noise-related operating restrictions at (EU) airports.

AirBaltic (BAU) and Austrian Airlines (AUL) will code share flights between Riga and Vienna.

(AUL) announced service to 4 new destinations from Vienna:
to Donetsk, Ukraine = 3x-weekly (Tuesday/Thursday/Sunday) CRJ-200 from March 26th;
to Ekaterinburg, Russia = 3x-weekly (Mondays, Wednesdays, & Fridays) 737-700 from March 27th;
Iasi, Romania = 6x-weekly from March;
Pecs, Hungary = 3x-weekly Dash 8-300 from March 26th.

January 2006: Austrian Airlines Group (AUL) announced that it plans to start scheduled services to Erbil in the Kurdistan Region of Iraq. The 2x-weekly service will be operated with A319s from March 9 and will increase to 3x-weekly in May. The flights will initially depart Vienna on Thursday/Sunday and Erbil on Monday/Friday. From May 2nd Austrian (AUL) will operate 3x-weekly departing Vienna on Tuesday/Thursday/Sunday and Erbil on Monday/Wednesday/Friday.

Austrian Airlines (AUL) Group is eyeing service to new destinations in Siberia. "We are currently studying whether to start services from Vienna to Tjumen and Celyabinsk. We also hope to get permission to operate regular services to Kazakhstan during 2006," (CCO) Josef Burger said. In addition, (AUL) plans to add 19x-weekly frequencies to Eastern European destinations and 21x-weekly to Western Europe.

Burger also said that from summer 2006, (AUL) will offer a new pricing structure intended to give customers more flexibility. The move in large part is aimed at responding to the massive influx of low-cost carriers into (AUL)'s markets, particularly its Vienna hub.

Austrian Airlines Group (AUL) transported a record 10.1 million passengers in 2005, (+7.6%) more than in 2004. Yearly passenger traffic in (RPK)s increased (+7.6%) to 22.8 billion, capacity (ASK)s rose (+5.7%) to 30.8 billion and load factor improved (+1.3) points to 74.1% LF.

A319-112 (2652, OE-LDG), delivery.

February 2006: An ill-timed expansion coupled with a lack of fuel hedges put an end to Austrian Airlines (AUL) Group's profit hopes for 2005 as the company reported a net loss of -€129.1 million/-$153 million compared to income of + €43.9 million for 2004.

Although the company did not provide a 4th-quarter result, it has been calculated that the parent of Austrian Airlines (AUL), Austrian Arrows, Lauda Air (LAL) and Slovak Airlines (SLO), lost -€59.4 million in the December period compared with income of +€37.2 million in the fourth quarter of 2004. "2005 was not a success at all and a big disappointment," outgoing (CEO) Vagn Soerensen said during the results conference.

Annual operating revenue grew +5.4% to €2.49 billion, driven largely by an +8.3% rise in traffic revenue to €2.26 billion, but operating expenses climbed +13.2% to €2.59 billion, resulting in an operating loss of -€100 million versus (EBIT) of €74.4 million in 2004. (EBIT) adjusted for profit/loss on asset sales, exchange rate fluctuations and other items swung from a +€9.3 million to a -€52 million.

Explaining the lack of fuel hedges, which left the group fully exposed to a + 46.6% increase in fuel expense on only a +5.7% growth in production, (AUL) stated that it would have needed "a significantly stronger capital structure" to employ the hedging instruments available on the market. Also contributing to the rise in operating expense was a +7.6% hike in personnel costs "caused by the expansion in staffing made in anticipation of higher demand."

On the brighter side, the carrier noted that personnel costs per employee actually fell -2.7%, while (CFO) Thomas Kleibl said (AUL) was able to reduce net debt from €1.24 billion to €1.05 billion.

Soerensen said no staff cuts are planned. The company has an efficiency effort dubbed "Turnaround In The Turnaround" that should produce a positive effect amounting to €100 million from 2007. It expects breakeven adjusted (EBIT) this year on a +4% capacity rise in (ASK)s. Passenger boardings grew +7.6% last year to 10.1 million.

The Austrian Airlines (AUL) Group will end all long-haul charter flying by its Lauda Air (LAL) leisure subsidiary at the end of the current winter season, with its 6 767-300ERs and 777-200ERs repainted in (AUL)'s livery. Some charter flights, such as those to Mauritius, will be terminated, while others will become scheduled services, (CCO) Josef Burger said. Burger said the Lauda (LAL) name may disappear entirely, "but as long as the Lauda Air (LAL) brand makes sense for the Group, we will keep it." (LAL)'s short-haul fleet consists of 2 A320s, 7 737-800s, 2 737-700s and 1 737-600.

Austrian Airlines (AUL) Group named Alfred Oetsch (CEO) succeeding Vagn Soerensen from May 1. Oetsch will join the company on April 1.

Vienna International Airport for the 1st time in its history, handled >1 million passengers during the traditionally weaker month of January as throughput grew +9.9% compared to January 2005 to 1.08 million. Transfer passengers rose +14.8%. Flight movements increased +3.3% during the month and maximum take-off weight (MTOW) grew by +3.9%. Cargo turnover increased +21.1% over January last year, to 500,839 tonnes.

(AUL) will delay its new services from Vienna to Erbil. Flights to the Kurdistan region were scheduled to start March 12. (AUL) would have been the 1st European carrier to offer direct flights to Iraq and said it has not given up on launching the route at a later date.

Separately, (AUL) and Croatia Airlines (CRH) will increase code share operations on the Vienna to Split route to 9x-weekly and on Vienna to Dubrovnik to 8x-weekly flights. In addition, Croatia Airlines (CRH) said it will close its Split to Munich and Zagreb to Prague services by the end of March. Together with code share partner Austrian Airlines (AAL), Tarom (TRM) will offer 4x-weekly services from Iasi to Vienna, 5x- from Sibiu to Vienna and 5x- on the Cluj to Vienna sector.

March 2006: Ural Airlines (U6/Ekaterinburg) has signed a code share agreement with Austrian Airlines (AUL) (OS/Vienna) for Ekaterinburg to Vienna. Austrian Airlines (AUL) is delaying the start of service from Vienna to Erbil (Iraq), which was planned for March 12th.

April 2006: Austrian Airlines (AUL) reduced frequencies from Vienna to Tehran from f5x- to 3x-weekly flights, owing to lower demand attributed to the worsening political climate. (AUL) now operates a Vienna departure on Wednesdays, Fridays & Sundays and a Tehran departure on Mondays, Thursdays, & Saturdays using an A320.

The Austrian Airlines (AUL) Group unveiled a new fare concept for short- and medium-haul flights permitting passengers to combine different fares and booking classes on the same itinerary, booking economy for an outbound flight and business class for the return, for example. (AUL) also restructured economy fares to narrow the range of prices and is offering a "red-ticket" fare with an "all-in" price ranging from €159/$196.2 to €299 depending on destination. It introduced a new business (C) class fare, Business Holiday for leisure travel on routes with high tourist potential. Accompanying the revised fare structure is introduction of "optimized traffic flow management," allowing "differentiated management of local and transfer traffic." As a result, "(AUL) flights will now be managed in accordance with their value contribution to the total system." For example, under the previous system, flights could be booked only on an individual basis. In the event of connections, the same fare class had to be available for all legs of the route or the ticket could not be sold. Finally, the group has given its website a facelift to make it more user-friendly, with a completely redesigned booking platform offering greater price transparency and simplicity. Internet-based revenue rose +74% in 2004 and represents 12% of revenue currently. (AUL) aims to double this share in 2006.

Meanwhile, in order to be more competitive against carriers such as Emirates Airlines (EAD), Austrian (AUL) planned to install intercontinental business (C) class seats in several 737-800s for flights to the Middle East. Currently it operates 1 737-800 outfitted with 16 (C) business class and 142 (Y) economy seats for flights to Dubai.

Aviapartner signed a contract with 4 Star Alliance members: Lufthansa (DLH), Swiss International Air Lines (CSR), Austrian Airlines (AUL), and (TAP) Portugal to provide full handling activities at Amsterdam Schiphol, effective May 1. Value of the contract was not disclosed, but the Brussels-based ground handler said it is "one of the largest contracts" it has signed and covered >10,000 flights per year for 3 years.

May 2006: The Austrian Airlines (AUL) Group is under increasing pressure to stabilize its negative financial situation. "Austrian (AUL) has a chance to survive. The only problem I see is that we are running out of time," new (CEO) Alfred Oetsch said.

(AUL) said its Internet bookings for the January to April period rose +62% over the year-ago period, thanks to a more user-friendly website featuring more languages.

Employees = 7,662.

Austrian Airlines (AUL) will resume nonstop service from Vienna to Beirut on June 2nd. (AUL) will operate 3x-weekly departing Vienna on Wednesdays, Fridays, & Sundays, and Beirut on Mondays, Thursdays, & Saturdays and using an A320. (AUL) will increase the frequency of flights from Vienna to Moscow by adding a 3rd flight Mondays through Thursdays, departing Vienna in the morning and operated with an A319. It launched 3x-weekly flights to Ekaterinburg in April, bringing its weekly Russian service to 52x-weekly.

(AUL) operated a "Life Ball 2006" flight from New York (JFK) to Vienna, which carried 120 (VIP) passengers to the Life Ball 2006 using A330 (OE-LAP). On board were international stars like singer Anastacia, Kool & the Gang, design duo Heatherette and Lady Kier. The catwalk-beauties like supermodel Cordula Reyer, Maggie Rizer, Liya Kebede, Tyson Ballou and many more, came with the Austrian special flight and had been invited by top-model agencies in New York to Vienna especially for this charity-event. The celebrities were accompanied by their hair-stylists, make-up artists and managers, who will took care of a sensational performance in spectacular outfits at this annual event. For this flight, Austrian Airlines (AUL) created a distinct and visual symbol: An Austrian A330 was specially branded with the Life Ball logo and the logo of the main sponsor "MINI." The long range jet with the registration (OE-LAP) was to be a symbol and promoter for the Life Ball 2006. It was to be flying for 1 month with this special branding not only to New York, but also to Toronto, Shanghai, Sri Lanka and the Maldives and carried the idea behind Life Ball to many corners in the world, see photo.

737-8Z9 (33834, OE-LNT), delivery.

June 2006: Austrian Airlines Group (AUL) flew 1.9 billion (RPK)s passenger traffic in May, an increase of +3.9% over the year-ago month. Capacity rose +4.3% to 2.7 billion (ASK)s, dropping load factor -0.3 point to 69.4% LF.

In what All Nippon Airways (ANA) President and (CEO), Mineo Yamamoto described as a "great day for (ANA) and the Star (SAL) Alliance, and the dawn of a new age" for air travel in Japan, 10 of the 11 Star Alliance airlines serving Tokyo Narita begin operating today from co-located facilities in the airport's Terminal 1 South Wing. Star members that moved overnight into the newly rebuilt terminal are (ANA), Air Canada (ACN), Asiana Airlines (AAR), Austrian Airlines (AUL), Lufthansa (DLH), (SAS) Scandinavian Airlines, Swiss International Air Lines (CSR), Singapore Airlines (SIA), Thai Airways (TII), and United Airlines (UAL). Air New Zealand (ANZ), which has a code sharing relationship with Japan Airlines (JAL), remains in Terminal 2.

Bringing the carriers under one roof will result in international-to-international connecting times being reduced >-50% from 110 minutes to 45 minutes and create "huge opportunities" to develop domestic connections with (ANA), according to Star (SAL) (CEO) Jaan Albrecht. In total, the 10 airlines offer >794 weekly flights to 30 destinations in 15 countries from Narita.

Among the many firsts in the spacious and attractive South Wing, are common "zone check-in" areas for all carriers save (SIA), with check-in areas organized by class of travel across the airlines. The hall features a record 126 common-use self-service check-in kiosks and common-use check-in desks. (ARINC) is the technology vendor for both.

Travelers on (ANA), United (UAL), Air Canada (ACN) and Austrian (AUL) can use the kiosks, which are equipped with passport readers. By year end, Star expects passengers on any of the 10 member carriers to be able to check in via the kiosks. The new terminal also offers curbside check-in, a first for Japan, and the country's first baggage reconnecting facility for passengers connecting from an international to a domestic flight.

Additional and upgraded premium lounges are part of the package, as is a new pier with eight attached airbridges. (ANA) has 4 lounges with shower facilities, which it claims is a 1st for a Japanese carrier. Its domestic arrivals lounge also is equipped with showers.

This is the 3rd and largest "Move Under One Roof" exercise for the Star (SAL) Alliance operators. Last year, it brought carriers at Paris Charles de Gaulle T1 together and Star (SAL) Alliance members at Centrair near Nagoya also are co-located.

(AUL) is investing €40 million/$50.3 million in a new business (C) class product on its long-haul fleet, including lie-flat seats and Connexion by Boeing Internet service. From this summer, it will begin refurbishing its fleet of 3 777-200s and 6 767-300ERs.

July 2006: Austrian Airlines (AUL) Group (AAG) flew a consolidated 2.13 billion (RPK)s passenger traffic in June, a +1.8% increase over the year-ago month. (ASK)s climbed +2.8% to 2.9 billion, dropping load factor -0.7 point to 73.5 LF%.

Austrian Airlines (AUL) Group (AAG) announced its half-year financial results and revealed that it will not achieve a balanced adjusted (EBIT) this year as planned owing to "continued high kerosene prices that exceed our budgetary assumptions, already set high as a precautionary measure, and because of the negative consequences of the capacity bottlenecks that have emerged at Austrian air traffic control since spring," according to (CEO), Alfred Oetsch.

(AUL) will hold talks with unions representing flight crew (FC) and ground staff with the hope of revamping labor agreements by the end of September. "We have to be more flexible in time and money," Oetsch said. No details concerning the carrier's objectives were divulged.

(AAG) confirmed its intention to end its 9x-weekly services to Australia by March. The move could include en route destinations Singapore and Kuala Lumpur as well. High fuel prices made the Australia routes uneconomical and the airline does not think the current 80% LF load factor can be improved. It also may close one of its 3 North American destinations (New York (JFK), Washington Dulles and Toronto). It said it will focus on serving fewer destinations with more frequencies and that every route in the network will be investigated. It also will evaluate whether or not to maintain its relationship with its Lauda Air (LAL) subsidiary.

(CFO) Thomas Kleibl said (AUL) would not release a financial forecast for 2007.

Sabre Airline Solutions said (AUL) chose its Rocade Crew Management System to plan and track crew scheduling across its operation. Sabre also will provide professional services and ongoing support during the implementation and for a period of at least 5 years.

The Austrian Airlines (AUL) Group said its ontime performance has suffered as a result of poor Air Traffic Control (ATC) at its Vienna hub, and it expects several million euros of extra costs. Labor issues and union squabbles at Austro Control have reduced slots at the airport from 40 - 45 per hour to just 25. (AUL) expected 83% ontime performance, but in the past several days, it has dropped to 60%.

(AUL) will implement several organizational changes on September 1 that it said should boost quality and productivity. Activities centering on customer contact, both on the ground and in the cabin, will be folded into a new Product Management & Customer Services Division headed by Peter Baumgartner, a former Siemens manager. The Network and Sales divisions will merged and supervised by Rudolf Mertl. Former Flight Operations Head, Christian Fitz will lead the new Quality, Collective Decision Making and Process Management Division, which will be in charge of increasing cooperation with Vienna Airport and Austro Control. Friedrich Strahammer will take over the Flight Operations division.

Jet Airways (JPL) linked its frequent-flier program with those of Austrian Airlines (AUL) and Thai Airways (TII). Jet (JPL) Privilege members can earn and use miles on flights operated by Austrian (AUL) and Thai (TII), whose loyalty program members can do the same on Jet (JPL) flights.

Austrian Airlines (AUL) Group is looking for further cost-cutting measures and is considering reducing or ending service to Australia. According to a source close to airline management, Austrian pays €400,000/$500,600 in operational costs for each 1 of its 9x-weekly 777-200ER rotations to Australia, where it serves Sydney 6x-weekly and Melbourne 3x-weekly. The route is being pressured by high fuel prices and fierce competition from Middle Eastern carriers operating between Europe and Australia. (AUL) (CEO) Alfred Oetsch is expected to discuss (AUL)'s strategy next week at a press briefing. (AUL) is the only European Star (SAL) Alliance member that offers direct flights to Australia.

August 2006: The Austrian Airlines (AUL) Group (AAG) will launch a wholly owned subsidiary that will offer 3rd-party Maintenance Repair & Overhaul (MRO) work at its 1,200-employee maintenance facility. "Our primary goal is to make better use of our quite expensive resources at the base in Vienna," (CEO) Alfred Oetsch said. Currently, (AAG) is doing work for Lufthansa (DLH) and a few other carriers. Oetsch said Austrian Technik can compete in the tough (MRO) business. Further details about the project will be available in September. The carrier also operates Austrian Technical Center Bratislava, where it performs "C" checks for Austrian (AUL)'s F 70/F 100 fleet and Slovak Air (SLV).

Oetsch confirmed the closure of Singapore and Kuala Lumpur, which were served on its route to Australia that ends in March. (AUL) is evaluating new long-haul destinations for the 3 777s it used on the route. "We will focus on our strategy between East and West, but we will never fly to Johannesburg or to South America," he said. Chicago could be 1 of the cities added.

Slovak Airlines (SLV) ownership faces an uncertain future. Austrian Airlines (AUL) Group, which holds 62% of the Slovakian carrier, is evaluating its relationship with the subsidiary, which it took over in 2005. "We rescued Slovak Airlines (SLV) and in doing so, we did the government a favor. But with that deal, there were commitments from the government, which so far have not been met," Austrian CEO, Alfred Oetsch said. The deal included a commitment from the Ministry of Transport, which promised to assume debts when Austrian bought in. Oetsch further revealed that "we realized that is not easy to do business in Bratislava, even with a lower cost structure like Slovak Airlines (LV) has." Austrian (AUL) also announced that it no longer is interested in participating in the privatization of Bulgaria Air (LZB).

Emirates (EAD) SkyCargo and Austrian Airlines (AUL) Cargo reached a blocked-space agreement on Emirates (EAD)'s weekly A310F freighter service between Vienna and Dubai. (EAD) will switch to an A340-500 from a 777-200 on its daily cargo flight to Nagoya Centrair from October 29.

(SAS) Cargo became the 8th airline to join Cargo Portal Services (CPS), the Unisys-operated online booking portal that gives freight forwarders free Internet access to member carriers' schedules and space availability and the ability to book and confirm shipments in real time. (CPS) membership includes American Airlines (AAL), Air Canada (ACN), Austrian Airlines(AUL), (KLM), Northwest Airlines (NWA), and United Airlines (UAL). Continental Airlines (CAL) is in the process of going live.

October 2006: To strengthen its eastern operation, Austrian Airlines (AUL) plans to partner with Russian airline alliance AiRUnion (ZXD)/(DOD)/(OMK)/(SMR) beginning next summer. The wide-ranging agreement is expected to involve a multihub strategy with Vienna, Moscow Domodedovo (DME), Samara and Krasnoyarsk. Austrian (AUL) will move its Moscow operations to (DME) from Sheremeteyvo.

Austrian (AUL) will inaugurate nonstop service from Innsbruck to Moscow's Domodedovo Airport on December 23rd. (AUL) will operate on Saturday weekly using a 737-800.

(AUL) will move its Vienna to Moscow service from Sheremetievo to Domodedovo Airport (DME) on February 19th. (AUL) will operate 2x-daily on the route as well as a 3rd flight on Mondays, Tuesdays, Wednesdays, & Thursdays. From the end of March, the 3x-weekly will operate daily, except Saturdays.

The Austrian Airlines Group plans to reduce its workforce by -350, including -80 pilots (FC), and lease out 2 A340-300s and 3 F 70s after several weeks of talks with the Betriebsrat union concerning the introduction of more flexible work rules did not produce a deal.

"Now it is time to react," (CEO) Alfred Oetsch said. "We plan to do this without layoffs, but I cannot rule that out." Savings as a result of the move should reach double-digit million euros.

Herbert Bammer, a former (CEO) of (AUL), has died after a long illness at the age of 66.

(AUL) also is preparing a long-awaited capital increase. By the middle of next month, it expects to float 68 million shares, which should generate €350 million/$444.4 million. "Our main target is to get back to +ve results. Otherwise fresh money helps just for a short time. A big part of the new money will be invested in measures to come back to [profitability]," Oetsch said. The Austrian government owns 39.7% of the struggling carrier. A consortium including Bank Austria Creditanstalt, Vienna Insurance Group, Raiffeisen Zentralbank and (BAWAG) (PSK) owns 10.3%.

(AUL) will expand other long-haul services as well in order to use its fleet of 4 A330s, 3 777s and 6 767s, plus a 4th 777-200ER to be added next January, more efficiently following the closure of its Australian service. With the beginning of the summer schedule, it will resume 4x-weekly service to Chicago O'Hare, becoming daily in June, aboard A330s. Flights to New York (JFK) will increase to 13x-weekly and seat capacity to Washington Dulles, Tokyo Narita, Bangkok and Delhi will be augmented with the addition of 777s. In Asia, (AUL) is considering flying to Karachi and a 3rd Indian city.

November 2006: The Austrian Airlines (AUL) Group launched its capital increase earlier this month, following a unanimous vote by shareholders at an extraordinary Annual General Meeting (AGM), issuing up to 51.68 million bearer shares with no par value. The subscription and offer period concludes December 1, a (AUL) spokesperson said. Maximum offer price is €8.12/$10.66 per share. "The fresh capital will enable us to strengthen both our earning power and capital structure in the long term, and consistently accelerate the restructuring of the group," (CEO) Alfred Oetsch said. Principal shareholder (OIAG) and shareholders represented in the Austrian syndicate, will take part and retain their stake of 50% plus 1 share. (AUL) warned that its guidance for unadjusted (EBIT) for full-year 2006, would be "significantly negative," although it should improve from 2005's operating loss of -€100 million.

(AUL) said that it would cut its long-haul fleet from 16 to 10 airplanes, resulting in route eliminations and likely job reductions.

(AUL)'s supervisory board on November 1 approved a proposal to eliminate 4 A330-200s in 2007. With the sale of 2 remaining A340-300s slated to be completed next year, the long-haul fleet will consist of 4 777-200ERs and 6 767-300ERs by no later than the end of 2007.

According to media reports in Austria, (AUL) is expecting a loss from its long-haul operations of -€80 million/-$102.1 million for this year, widened from a loss of -€75.9 million last year. It said its long-haul program has come under "increasing commercial pressure," noting that the share of passengers, who transfer from the current long-haul network onto medium-haul flights is 14% and that long-haul services generate only 7% of its overall revenue.

As a consequence of the fleet downsizing, services to Shanghai will be terminated from January 7, flights to Phuket, Mauritius and Colombo/Male will end in April, and flights to Kathmandu will terminate in May. Austrian media is reporting that -700 to -1,000 employees are expected to lose their jobs as a result of the fleet reductions.

Austrian (AUL) will inaugurate non-stop service from Vienna to Erbil (Iraq) on December 11th, 9 months after it postponed the service. (AUL) will operate 2x-weekly on Mondays & Fridays using an A319. (AUL) said the city in the Kurdistan region now is secure. It will be the 1st European carrier to operate to Iraq. Meanwhile, it has ceased its Vienna to Pecs service.

Some 200 Austrian Airlines (AUL) Group (AAG) pilots (FC) will leave (AUL) voluntarily and take advantage of its "Golden Hand Shake" offer, which expired this month. Austrian newspaper "Wiener Zeitung" reported that some pilots (FC) will get up to €650,000/$854,400 for taking the offer. According to reports, 400 to 600 flight attendants (CA) also face reduction, and will receive up to 11 months salary, if they leave voluntarily. Financially troubled (AAG) is reducing its long-haul fleet by 4 A330-200s and 2 A340-300s. It employs 710 pilots (FC), 1,900 flight attendants (CA), and 2,400 ground staff (MT)).

December 2006: The Austrian Airlines (AUL) Group said it raised +€367 million through the offer of up to 51.68 million bearer shares, that concluded December 1 with a final offer price of €7.10 per share. "With the successful completion of our transaction, we have taken an important step in our restructuring program," (CEO) Alfred Oetsch said.

The Austrian Airlines (AUL) Group established a new subsidiary to promote 3rd-party jet airplane Maintenance Repair & Overhaul (MRO). Austrian Airlines (AUL) Technik Marketing GmbH will employ 10 and look to generate business for (AUL)'s Maintenance division, which employs 1,100 workers and staff (MT) and produces €230 million/$302.1 million in maintenance work annually.

Austrian Airlines (AUL) Group (AAG) (CEO) Alfred Oetsch confirmed during the Star (SAL) Alliance meeting this month in Istanbul that none of the carrier's long-haul routes are profitable. "But with the restructuring of our long-haul network, it should become profitable soon," he insisted. (AUL) has simplified its fleet and plans to operate only 777-200s and 767-300ERs on long-haul routes. It is taking delivery this month of its 4th 777-200. Along with its 6 767-300ERs, Oetsch said the long-haul fleet is the right one for (AUL) going forward.

(AUL) Executive VP & General Secretary Peter Malanik was appointed Chairman of the Star (SAL) Alliance management board. He replaces United Airlines (UAL) Executive VP & (CCO) Graham Atkinson.

(AUL) launched Vienna to Erbil service with an A319. The flight will operate 2x-weekly.

New lie-flat seats in business class (C) and an increase in frequencies on North Atlantic routes also should help revitalize long-haul service, he said. (AAG), which leases out 2 A340-300s to Swiss International Air Lines (CSR), plans to sell 4 A330-200s in the near future, he added, noting that the carrier has "requests from 36 interested buyers" for the airplanes.

(AUL) also plans a simplified medium-haul fleet. Currently, it operates 10 737NGs and 20 A320 family airplanes. "The plan [for a simple medium-haul fleet] will strongly depend on our talks with airplane manufacturers and leasing companies," Oetsch said. He emphasized that (AUL)'s focus is on improving passenger service. As an example, he noted that it will remove 1 seat row on each of its F 100s to "add 15 cm more legroom for our business class (C) passengers."

January 2007: Austrian Airlines (AUL) Group (CCO) Josef Burger said in Iraq, the carrier has secured traffic rights to all airports in the country, meaning cities like Baghdad, Basra, Mosul and others can be served with daily frequencies.

"As soon as it is safe enough to allow for operations, we will be 1 of the 1st carriers to fly to Baghdad," Burger said, adding that the recently launched 2x-weekly service to Erbil will expand to 3x-weekly by the end of March and eventually may become daily. "We came back to Iraq after 16 years. (AUL) is the 1st European scheduled airline in the country," he said.

The move is part of (AUL)'s effort to upgrade its Middle East operation. It is looking into increasing (MTOW) on select A320s and A321s, in order to extend their range and installing a long-haul business class (C) cabin so as to compete with airlines from the region using wide body airplanes. It also intends to expand its Middle East network. Riyadh is 1 destination under consideration.

Separately, Burger said (AUL)'s transfer business is changing rapidly and (AUL) is focusing more energy on developing a hub strategy to serve secondary Eastern European destinations. "60% of our business is transfer [traffic]. But just 16% of that is between big cities in the East, like Bucharest to Paris in the West, for example. This transfer concept is a dying species. We want to trim that down and focus more on transferring business to niche [destinations] in Eastern and Central Europe" from big cities in Europe and the USA.

Slovak Airlines (SLV) ceased scheduled operations this month, after Austrian Airlines (AUL) Group (AAG), which holds 62% of the carrier, took possession of its fleet, citing the Slovakian government's failure to honor a legal agreement. "1 Fokker F 100 and 1 Boeing 737-300 are the property of (AAG) and we have decided to immediately return the airplanes in order to guarantee that Group property is secure," an (AAG) spokesperson said, adding that 1 737-200 will be left with Slovak (SLV) for charter flights. (AAG) acquired its 62% stake in January 2005, as part of a capital increase and the government assumed Slovak (SLV)'s liabilities as part of the deal. Those payments, due last spring, were not made, forcing (AAG) to pull the plug. "There is no perspective for the restructuring of the company," (AAG) said. Slovak (SLV) employs approximately 100 staff and operated scheduled F 100 services from Bratislava to Brussels and Moscow Sheremeteyvo.

He also revealed that Austrian (AUL)'s final A330s and A340s will leave the fleet by April 29.

Austrian Airlines (AUL) took delivery of its 4th 777-200ER, at which time it had no other orders or options placed with any airplane manufacturer.

777-2Z9ER (35960, OE-LPD "America"), delivery.

February 2007: Austrian Airlines (AUL) Group took another step in its "Focus East" strategy, when it formally switched its Moscow operation to Domodedovo (DME) after 47 years at Sheremetyevo (SVO). "It was not an easy decision for us," Austrian (AUL) (CCO) Josef Burger said. "With our new partner AiRUnion (ZXD)/(DOD)/(SMR)/(OMK), we have access to 41 destinations from (DME)." (AUL) formerly worked with Aeroflot (ARO), but severing ties with a SkyTeam (STM) Alliance carrier and aligning with AiRUnion makes sense for (AUL), which serves Moscow 3x-daily and offers 39x-weekly flights from Vienna to 5 Russian destinations. It will add a 6th this year, has rights to a 7th, and is interested in launching regional service in the country, Burger said. The (AUL) Group takes >200,000 passengers to Russia each year, and expects its alliance with AiRUnion to produce 100,000 additional passengers. Meanwhile, AiRUnion is preparing to offer flights to Vienna from Samara and Krasnoyarsk. (AUL) operates 566x-weekly, including code share operations, to 45 Eastern and Central European destinations. The 2 million passengers it transports on those routes, constitute a quarter of its business. Among Western European carriers, it serves the 2nd most destinations in Russia after Lufthansa (DLH)'s 10. (AUL) is looking to send maintenance east as well. (CFO) Thomas Kleibl said an F 70/F 100 "competence center" will be established in Bratislava, employing 50. "We are in talks with partners, like Honeywell (SGC) to bring in more maintenance work from 3rd-party carriers." The (AUL) Group is 1 of the largest Fokker operators in Europe with 9 F 70s and 12 F 100s. It will add 2 F 100s this year, and 2 in 2008.

Austrian Airlines (AUL) will launch a 3x-weekly, Vienna to Bourgas service on May 15.

Continental Airlines (CAL) became the 8th carrier to have its cargo booking system go live on the Unisys-operated Cargo Portal Services (CPS), a Web-based booking tool used by >2,500 freight forwarders. "Our customers want choice and convenience. (CPS) fills this need because of its rapid adoption by forwarders, its multicarrier model and its capability to handle virtually all types of cargo products," (CAL) VP Cargo Jack Boisen said. (CAL) joins American Airlines (AAL), Air Canada (ACN), Air France (AFA)/(KLM), Austrian Airlines (AUL), Northwest Airlines (NWA), Scandinavian Airlines (SAS), and United Airlines (UAL) on (CPS).

The Austrian Airlines (AUL) Group will transfer 3 of its 4 A330-200s to Star (SAL) Alliance partner, (TAP) Portugal, as part of its long-haul fleet reduction. The aircrafts will leave Austrian (AUL) by April 29.

March 2007: The restructuring of its long-haul network, lack of fuel hedges and other "extraordinary effects" created an environment in which "it proved impossible to achieve a positive result," according to Austrian Airlines (AUL) Group (CEO) Alfred Oetsch, whose company reported a widened net loss of -€49.1 million/-$64.5 million for 2006 compared to a -€29.6 million deficit in 2005. Revenue rose +8.4% to €2.59 billion and expenses climbed +6.4% to €2.75 billion, narrowing operating loss to -€89 million from -€100 million. Passenger numbers grew +7.1% to 10.8 million and load factor was ahead +0.2 point to 74% LF. Unit cost lifted +3.4% to €0.085. The company said yield "improved substantially" thanks in large part to fuel surcharges. Oetsch said (AUL)'s 4th-quarter capital increase was "another important step toward completing our restructuring program" and that the company is "now in a position to implement key measures more quickly." It said increased capital will make hedging of up to 20% of (AUL)'s fuel requirement possible. Oetsch continued: "We are pursuing a clear strategy focusing on Central and Eastern Europe. We shall continue to move forward with our quality and product offensive in 2007."

Starting June 12th, Vienna to Keflavik, using 737-800s, which will discontinue on August 21st.

April 2007: Austrian Airlines (AUL) will operate 4x-weekly Vienna to Talinn flights from June 4.

(AUL) Technik and Lufthansa Technik (DLH) (LTK) signed a Memo of Understanding (MOU) for "long-term cooperation" that (AUL) said will help "make a lasting improvement to its competitiveness and consolidate its market position, particularly at the Vienna location." The deal includes no capital integration between the companies, but will help (AUL) reduce costs, retain Vienna as an independent Maintenance Repair & Overhaul (MRO) center and "redevelop joint locations." More details will be announced "in the coming weeks." The move is part of Austrian (AUL)'s plan to reduce costs associated with its 1,100-employee (MRO) department, which came to €270 million/$366.8 million last year.

May 2007: Austrian Airlines (AUL) starts Vienna to Chicago (ORD) using 767-300s.

(AUL) will become the 1st European operator of 767-300ER blended winglets after announcing an order for 6 retrofits, Aviation Partners Boeing (APB) said. (CEO) Alfred Oetsch said (AUL) will save -1,000 tons of fuel per year per airplane while extending range by approximately 670 km after installation, which will begin in spring 2009.

June 2007: Austrian Airlines (AUL) announced it is moving to the Star Alliance (SAL) Common Information Technology (IT) Platform (CITP) for its inventory and check-in systems. The (CITP) is hosted by Amadeus for participating Star member (SAL) carriers and is based on the Altea customer solutions suite. (AUL) joins Lufthansa (DLH) and United (UAL), as well as regional member carriers Adria Airways (ADH) and Croatia Airlines (CRH) in choosing to migrate to the new platform, expected to occur by mid-2009.

Austrian Airlines (AUL) Group (AAG) (CEO) Alfred Oetsch said Austrian (AUL) is facing growing competition on its routes to Eastern Europe and that in order to defend its critical "Focus East" strategy, and "keep our position strong," it will "consider whether to buy or take shares in 1 of the carriers in Eastern Europe." He did not provide further details, but airlines from countries like Romania, Bulgaria or Moldova may be among the most likely targets. "You don't buy an airline, you buy the market," he said. (AAG) already holds 22% of Ukraine International Airlines (UKR) and will increase its stake "whenever it is possible," Oetsch revealed. "Just like we started our cooperation with AiRUnion (ZXD)/(DOD)/(SMR)/(OMK), where we use Moscow Domodedovo as a hub, we would like to develop Kiev into a hub for us as well"

The Austrian Airlines (AUL) Group plans to announce an order for 10 long-haul airplanes, with additional options possible, by autumn. "Now we have the latest technical details about the A350. The race will be between the A350 and the 787," (CEO) Alfred Oetsch said. (AUL) will decide this summer if it will upgrade its Middle East service with installation of long-haul business class (C) seats on board 737-800s or A320 family airplanes. The dedicated fleet of 3 to 5 airplanes would connect new and existing destinations in the Middle East with its Vienna hub.

Other measures to turn around (AUL)'s long-haul operations already are well under way, Oetsch said. It lost -€40 million last year on the services. It stopped flying to Australia, Singapore, Kuala Lumpur and Shanghai, and phased out its 8 A330s/A340s. "A few month ago I said that none of our long-haul flights is making a profit. Today this has changed," he said, revealing that 2 of 4 North Atlantic routes are operating in the black. "We invested €30 million in our new business class (C) and passenger numbers [in business class (C)] have grown by +20% on long routes," he said, adding that he remains cautious about posting improved results this year. "We want to present (positive) results in 2009."

July 2007: The Austrian Airlines (AUL) Group (AAG) sees even more possibilities for its "Focus East" strategy of operating to secondary destinations in Eastern Europe and Central Asia. "In the next 10 to 15 years, there still will be many opportunities for us," (CCO) Josef Burger said, adding that all areas within range of medium-haul airplanes, or around 5 hours flying time from its Vienna (VIE) hub, are in play. It already is looking for new destinations in countries like Kyrgyzstan or Tajikistan. It will start 3x-weekly (VIE) to Astana service on September 4 aboard a 737-700 and will code share with Air Astana (AKZ). The Kazakhstan capital will become (AAG)'s 46th Eastern destination. (AUL) has permits to fly to 7 Russian destinations and already serves 5 (Tyumen and Voronezh are the others). For the winter schedule, it will launch a new service from Innsbruck to St Petersburg and add flights to Moscow Domodedovo. Recently, it added a 4x-weekly to its (VIE) to Erbil service. Burger said (AUL) carried >800,000 passengers on its Eastern European network in the 1st 5 months of 2007, up +15% from the year-ago period.

August 2007: Austrian Airlines (AUL) Group carriers flew 1.99 billion (RPK)s passenger traffic in July, down -19.2% on the year-ago month. Capacity fell -18.7% to 2.5 billion (ASK)s, and load factor dropped -0.4 point to 79.5% LF.

Austrian Airlines (AUL) Technik and Lufthansa (DLH) Technik (LTK) firmed an April Memo of Understanding (MOU) and signed a 10-year contract to increase a strategic cooperation, highlighted by the establishment of a 777 Maintenance Repair & Overhaul (MRO) center in Vienna that will service (LTK) clients and third-party customers. The center will be the first of its kind in Europe and is scheduled to be operational in July 2008 at the latest. "1st, we will start with 777 Engineering, then we want [to offer] more. The cooperation means a promising future not only for our 1,120 (AUL) Technik employees but the possibility to increase our workforce in a very tough market," (AUL) (CFO) Thomas Kleibl said. Kleibl revealed that he expects cost savings in the double-digit million euros thanks to the (LTK) cooperation, which will fill more maintenance capacity in Vienna. Eventually, up to 70% of Austrian (AUL) Technik's capacity may be used by (LTK) clients. Lufthansa (DLH) does not operate the 777, but (LTK) handles (MRO) on the airplane for 3rd-party customers. (AUL) flies 4 777-200ERs. (AUL) currently performs "C" checks on (DLH) Airbus (EDS) wide bodies in Vienna, and plans to continue to do over the next decade even as (LTK) expands its A330/A340 capability with establishment of its Malta base.

Kleibl said Austrian (AUL) is seeing greater potential in its F 70/F 100 (MRO) center in Bratislava. "Besides Alpi Eagles (ELG) from Italy, we have around 8 3rd-party customers and the figure is increasing," he said.

Austrian Airlines (AUL) Group (CCO), Josef Burger will resign effective September 30 after 6 years in the role, the company announced. (CEO) Alfred Oetsch assumed Burger's duties on an interim basis. Burger cited "irreconcilable and different opinions concerning the way of cooperation within the Management Board" for his decision.

(AUL) suspended its 4x-weekly Vienna toO Erbil (Iraq) service "until further notice" in light of the August 8 incident in which a Nordic Airways (NOQ) airplane was fired upon in Sulaimaniya. "Our intention to reintegrate Erbil into Austrian (AUL)'s scheduled program as soon as the security situation improves is unbroken," (CEO) Alfred Oetsch said. (AUL) said its Iraq service "had developed extremely positively" since its launch last December.

September 2007: Austrian Airlines (AUL) Group plans to launch 10x-weekly Vienna to London City flights on October 29, using F 70s.

Austrian Airlines (AUL) Group (AAG) (CEO) Alfred Oetsch said in Astana that talks are underway with government officials to open up new routes to destinations in Kazakhstan to augment the 3x-weekly Vienna to Astana service launched earlier this month. (AAG) also is looking to increase its presence in other Central Asia countries such as Turkmenistan, Azerbaijan and Tajikistan. "Every year, we see a potential to launch up to 4 new destinations in a radius [a maximum of] 6 hours flying time from Vienna," Oetsch explained. Also on the radar are new routes to the Middle East, he said. To be more competitive against carriers like Emirates (EAD) and Lufthansa (DLH), (AAG) is planning to install business-class (C) cabins in some of its medium-range airplanes such as 737-700s and A319s, that operate flights to Central Asia and the Middle East. "There are routes for which there is a demand for an airplane with an installed business class (C)," Oetsch said. "Some carriers think it is a negative [to operate] smaller airplanes on longer routes. But we see it [as a] positive because the [smaller airplanes] all are full." He predicted that (AAG)'s financial performance will improve, but declined to provide details. Since June, all long-haul routes have operated profitably, he said, noting that poor-performing services to Australia, Shanghai, Katmandu and Osaka have been dropped. "We see significant growth in our main markets," he said.

October 2007: Lufthansa (DLH) Systems signed a contract with Austrian Airlines (AUL) for the use of SchedConnect, which will manage and optimize (AUL)'s code share schedules. The carrier offers >340,000 code share connections with >40 partners.

The Austrian Airlines (AUL) Group will reconfigure 4 A320s with a fixed business class (C) cabin to operate on longer routes to the Middle East and Central Asia. No further details were provided, and (CEO) Alfred Oetsch said news would be released in due course.

November 2007: The Austrian Airlines (AUL) Group (AAG) reported a +Euro29.2 million/+$42.2 million profit in the 3rd quarter, reversed from a -Euro 17 million loss in the year-ago period. (CEO) Alfred Oetsch said the company's "quality offensive," which includes new catering, more legroom on regional airplanes and new lounges, along with its continued focus on expanding its network in Central and Eastern Europe, have paid dividends. "We are well on our way, and from the way it looks today, striving to generate a profit, that will justify our paying a dividend by 2009," he said. 3rd-quarter revenue fell -8.2% to Euro687.6 million, and (EBIT) dropped -11.7% to Euro36.2 million, but adjusted (EBIT), which accounts for asset disposal, airplane transfer costs, currency valuations and impairment of the value of airplanes, rose +10.9% to Euro42.9 million. Passenger numbers declined -4.8% to 3.3 million, and load factor was steady at 78% LF.

The (AAG) completed the disposal of its A330 fleet during the quarter, returning the 4th and final airplane to the lessor. It has leased 1 of its 2 A340-300s to Swiss International Air Lines (CSR), and expects to lease out the 2nd to an unnamed carrier in the current quarter. It currently has no airplanes on order.

9-month net earnings were +Euro20.9 million, with (EBIT) improved to Euro 33.3 million from a -Euro9.1 million loss in the year-ago period.

December 2007: Austrian Airlines (AUL) Group carriers flew 1.41 billion (RPK)s passenger traffic in November, down -15.4% from the year-ago month. Capacity dropped -16.3% to 1.92 billion (ASK)s, and load factor rose +0.8 point to 73.4% LF.

Austrian Airlines (AUL) is planning a major expansion of its Eastern European and Middle Eastern networks, as it continues the restructuring that began in late 2006 with dramatic cuts to its long-haul operation.

In its summer 2008 schedule, Austrian (AUL) will launch service to Nizhny Novgorod and Sochi in Russia. Subject to securing traffic rights and final go-ahead from its executive team, Austrian (AUL) will also launch service to Jeddah and Riyadh in Saudi Arabia, Mostar in Bosnia, Wroclaw in Poland, and Baia Mare in Romania. Austrian (AUL) also plans to resume next summer service to Erbil in Iraq, which was initially launched in December 2006, but withdrawn in August, because of security concerns.

The expansion should give Austrian (AUL) 50 destinations in Central and Eastern Europe for its 50th anniversary in 2008. This includes 7 destinations in Russia, 6 in Ukraine, and 6 in Romania. Several of its destinations in these and other former Soviet countries, are not served by any Western carrier. According to Anton Bily Commercial Passenger Division Director for Western Europe: "That will be our focus in the future: to be the 1st Western carrier operating [in secondary cities in Eastern Europe]. We'd like to be in the Star Alliance (SAL) as the 1st mover."

Eastern Europe now accounts for 2 million of Austrian (AUL)'s 10 million annual passengers, and Bily says this is slated to grow to 2.8 million by 2010. He says Austrian (AUL) plans to add 3 to 4 new destinations in the region every summer. About 20 secondary cities are now being evaluated.

Austrian (AUL) has little appetite for expanding in Asia-Pacific, having dropped early last year, 7 unprofitable routes to the region. Charter division, Lauda Air (LAL) also shut its entire long-haul operation. "We were talking for years about what our strategy should be. Now it's crystal clear in the company. In order to stay independent, we needed to cut our long-haul routes," Bily says, adding Austrian (AUL) did not want to follow Swiss (CSR) in becoming swallowed by a larger European carrier.

Bily says Austrian (AUL) is also not interested in expanding its Western European network, which still accounts for 52% of its flights. He explains flights from Vienna to Eastern Europe are shorter, but have significantly higher yields.

(AUL) also no longer has any ambitions to invest in Eastern European carriers, following its failed project in the Slovakian capital Bratislava, only 60 km/37 miles from Vienna. (AUL) had a majority stake in Slovak Airlines, which shut down early this year. "The exercise in Bratislava showed us it's more profitable to focus on our core business," Bily says. "We came to a point that we realized it's a nice try, but it wasn't successful. We have good opportunities in Vienna."

He adds a new 17-gate pier will open at Vienna airport in 2009. As part of the restructuring, Austrian (AUL) has been improving its quality levels, on-time performance and premium offering. It has retrofitted all 10 of its wide bodies with new lie-flat business class (C) seats, and significantly larger business class (C) cabins. Bily said Austrian (AUL) has since enjoyed business class (C) load factors of >65%, prompting (AUL) to invest in new cabins for A320s operating medium-haul routes. By September, 4 A320s will be retrofitted with 24 business class (C) sleeper seats.

The Austrian Airlines (AUL) Group (AAG) announced that former Lufthansa (DLH) Marketing Director Andreas Bierwirth will become Chief Commercial Officer (CCO), and (AAG) General Secretary Peter Malanik will be promoted to Chief Technical Officer (CTO).

The (AUL) Group (AAG) and Lufthansa (DLH) Technik (LTK) signed a wide-ranging Maintenance Repair & Overhaul (MRO) cooperation agreement in Vienna, based on an (MOU) reached last spring, and firmed over the summer that the 2 said will reduce Austrian (AUL)'s annual technical costs by approximately -€15 million/-$21.6 million from 2009. Austrian (AUL) said (DLH)/(LTK) provides "a comprehensive dispatching in "C" checks and maintenance work, as well as in the airplane components section at (AUL)," part of a "considerable increase in utilization and efficiency," that will secure "the location of the (AUL) Technical Services Division in Vienna for the long term."

(AAG) employs 1,110 staff, including 88 based at its F70/F100 center in Bratislava. (CFO) Thomas Kleibl previously said that the cooperation will be highlighted by establishment of a 777 (MRO) center in Vienna, that will service (DLH)/(LTK) clients and 3rd-party customers. The center will be the 1st of its kind in Europe. Eventually, up to 70% of Austrian (AUL) Technik's capacity may be used by (DLH)/(LTK) clients.

Austrian Airlines (AUL) Group (CEO) Alfred Oetsch said at the Star Alliance (SAL) meeting in Beijing, that (AUL) is scouring the global airplane market in an attempt to add 2 A320s to its fleet by 2009. The airplanes, if acquired, will be outfitted with a new premium business class (C) cabin for flights to the Middle East and Central Asia. As far as interest in any of the Dash 8-Q400s being sold by the (SAS) Group, Oetsch said, "It would make sense to replace some of the smaller Dash 8-300s with Dash 8-Q400s, but we are not under pressure and haven't planned a fleet renewal."

Dash 8-Q315 (546, HB-LIE), delivery.

January 2008: 2007 statistics: 20.05 billion (RPK)s passenger traffic -11%; -12.2% capacity (ASK)s; +1 load factor for 75.6% LF.


Austrian Airlines (AUL) will increase daily Vienna to Dubai service to 13x-weekly, beginning November 13. Currently operated with a 737, the route eventually will be operated by A320s with 24 Business (C) Sleeper seats.

Austrian Airlines (AUL) Group (AAG) announced the expansion of its Russian network with 3x-weekly flights to Sochi, starting April 1 and Nizhny Novgorod the following day. Both routes will be operated by F 70s. (AAG) currently serves 5 Russian destinations and will be the Western carrier with the 2nd-largest presence in the country behind Lufthansa (DLH).

United Airlines (UAL) and Austrian Airlines (AUL) expanded their code share agreement to cover 20 domestic (UAL) flights from Chicago O'Hare.

The Austrian Airlines (AUL) Group appointed Walter Reimann to the position of VP International & Aeropolitical Affairs & Alliances. He succeeds new Chief Technical Officer (CTO) Peter Malanik.

Austrian Airlines (AUL) said that (CFO) Thomas Kleibl will resign effective March 12. (CEO) Alfred Oetsch will assume Kleibl's responsibilities.

February 2008: Austrian Airlines (AUL) Group flew 1.32 billion (RPK)s passenger traffic in January, down -19.9% from the year-ago month. Capacity fell -15.9% to 1.9 billion (ASK)s, and load factor declined -3.5 points to 69.6% LF.

Austrian Airlines (AUL) will launch 3x-weekly, Vienna to Baia Mare on April 21, and will become the 1st foreign carrier to serve this northern Romanian city, near the historic region of Maramures. On April 21, it will add a 3x-weekly flight from Vienna to its existing connections to Bucharest, Timisoara, Cluj, Lasi, and Sibiu.

The Austrian Airlines (AUL) Group (AAG) announced that Saudi investor, Mohamed bin Iassa Al-Jaber is in talks with airline management about a plan to invest €150 million/$221.7 million in the flag carrier, which is intent on protecting its independent status. Discussions regarding an investment are ongoing, and there are no results to report, (AAG) said. Al-Jaber owns 2 luxury hotels in Vienna. According to financial sources, (AAG)'s value on the stock exchange is nearly €450 million. Initial statements from Austrian politicians (state holding group (OIAG) remains a 42.75% owner of (AAG)) were positive about the potential investment deal. For its part, (AAG) said it regarded the investment as a strategic part of its plans to expand to the Middle East.

The Austrian Airlines (AUL) Group (AAG)'s negotiations with Saudi investor Mohamed bin Iassa Al-Jaber regarding his interest in investing €150 million/$220.5 million in the flag carrier continue, with several press reports out of Austria indicating that his investment could rise to €200 million and his stake in (AAG) to 30% from 20%. Many (AAG) shareholders and Austrian politicians (state holding group (OIAG), remains a 42.75% owner of (AAG)) have been positive about the potential investment. But Al-Jaber's intentions for the (AAG) remain unclear, other than the fact that his presence will help (AUL) with its Middle East expansion plans. Its supervisory board could approve the acquisition at its next meeting, scheduled for March 12.

AD Aerospace said Austrian Airlines (AUL) selected its CabinVu-123 Cockpit Door Monitoring System for 6 767s.

See video "Austrian Airlines (AUL) 777-200 VIE to SYD" - -

March 2008: Austrian Airlines (AUL) Group (AAG) finished its "successful transitional year" +€11.5 million/+$17.7 million in the black, reversed from a -€51.6 million loss in 2006, as "redimensioning of the long-haul segment produced a significant stabilization in our business model, and strengthened us overall," CEO, Alfred Oetsch said. In conjunction with several other announcements including approval of a new investor and the reconfiguration of its regional fleet, (AUL) reported a -4.2% fall in full-year revenue to €2.55 billion and a -8.2% drop in expenses to €2.53 billion. The resulting adjusted operating profit of +€39.1 million, compared to a -€8.3 million loss in 2006, was (AAG)'s first positive (EBIT) since 2004, and "was primarily due to cost reductions achieved as a result of the closure of fuel-intensive, low-yield long-haul destinations featuring low levels of direct demand," it said. Passenger numbers were level at 10.8 million, but load factor rose +1 point to 75.1% LF. Unit revenue climbed +13.6% against a +11.5% increase in (CASK). "We shall continue to pursue our course this year, and emphasize our strengths - - outstanding positioning in growth regions such as Central and Eastern Europe and the Middle East, an excellent product and high quality," Oetsch said. "The introduction of the new Austrian Premium Service from summer 2008 onwards, will set new standards for business passengers."

The A320 Premium Service will feature 24 electronically adjustable seats with 116 cm of legroom, "highly agreeable" incline, in-seat power, In-Flight Entertainment (IFE) and enhanced catering options for business class (C) passengers, (AUL) said. It will introduce the product on 3x-weekly, Vienna (VIE) - Riyadh and 4x-weekly, (VIE) - Jeddah flights, beginning in mid-August.

(AUL) is increasing the size of its regional airplanes. It will replace one 50-seat CRJ with an F 100 and dispose of two additional CRJs and its two oldest Dash 8-300s flying for Tyrolean Airways. It will acquire four Dash 8-Q400s from (SAS) and put them into service with Austrian Arrows. Each airplane will require €1.5 million in maintenance and modification.

Austrian Airlines (AUL) Group (AAG)'s principal shareholder, state holding company (OIAG), reached a deal with Saudi-Austrian investor Mohamed bin Iassa Al-Jaber to take a 20% stake in the carrier through a capital increase. The investment of approximately €150 million/$230.1 million will enable Austrian Airlines (AUL) to purchase three A320s for operations to the Middle East, Austrian media reported. An (OIAG) statement said Al-Jaber's involvement will help (AUL) speed up its expansion in the region and reiterated that it intended to remain an independent airline as long as it was economically justified and in the interests of the national economy. (AAG) has a market capitalization of €480 million.

Beijing Capital International Airport's new $3 billion-plus Terminal 3 opened as Shandong Airlines (SHG) (flight SC1151 arrived from Jinan at 8:39 am. UK architect, Norman Foster claimed it is the largest covered structure ever built - - 3.25 km long and 1.3 million sq m of floor space. Construction began in March 2004. The airport said the three-concourse facility welcomed Shandong (SHG), Sichuan Airlines (SIC), Qantas (QAN), Qatar Airways (QTA), British Airways (BAB), and El Al (ELA). A second move is scheduled for March 26 when Air China (BEJ), Shanghai Airlines (SHA), (SAS), Austrian Airlines (AUL), Lufthansa (DLH), Asiana Airlines (AAR), Air Canada (ACN), United Airlines (UAL), (ANA), Thai Airways (TII), Singapore Airlines (SIA), Finnair (FIN), Cathay Pacific Airways (CAT), Japan Airlines (JAL), Dragonair (DRG), Turkish Airlines (THY), Emirates (EAD), Air Macau (MCU), S7 Airlines (SBR), and EgyptAir (EGP) will transfer to the new building. "Reuters" reported that airport capacity will be boosted to 76 million per year from the 52 million it served in 2007. The baggage system can handle 19,800 pieces per hour, it said.

Later, Star Alliance (SAL) carriers Air Canada (ACN), Air China (BEJ), (ANA), Asiana Airlines (AAR), Austrian Airlines (AUL), (LOT) Polish Airlines, Lufthansa (DLH), (SAS) Scandinavian Airlines, Shanghai Airlines (SAL), Singapore Airlines (SIA), Thai Airways (TII), Turkish Airlines (THY), and United Airlines (UAL) each completed the transfer of their operations to Beijing International's Terminal 3. The move was part of the collocation plan developed as a result of Air China (BEJ) and Shanghai Airlines (SAL) joining the alliance last year. A similar collocation will be completed at Shanghai Pudong on April 29.

April 2008: Austrian Airlines Group suffered a -€60.4 million/-$95.3 million loss in the first quarter, widened from a -€16.3 million deficit in the year-ago period, which prompted the company to say it expected a fall in full-year adjusted (EBIT) "due to the time-lagged effect of measures implemented through adjustment of fares and surcharges." Despite the "continued deterioriation in market conditions," (AUL) has not given up on expansion. It will add two leased Premium Service A320s in 2009 and continue to build its network in Central and Eastern Europe and the Middle East, which CEO, Alfred Oetsch said "will distinguish" Austrian (AUL) from its competitors. First-quarter revenue fell -6.4% to €525.3 million, as (AUL) continued to "redimension" its long-haul segment. Costs dipped -0.3% to €593.5 million, as fuel prices offset the benefits of network rationalization. Adjusted (EBIT) was a -€42.2 million loss, compared to a -€20.6 million loss in the year-ago period. The company flew 4.13 billion (RPK)s during the quarter, down -16.6% year-over-year, against a -14.6% decline in (ASK)s to 5.7 billion. Load factor fell -1.8 points to 72.5% LF. Passenger numbers rose +2% to 2.3 million. In March, it flew 1.52 billion (RPK)s passenger traffic, down -12.7%, against a -13.9% fall in (ASK)s to 2.01 billion. Load factor rose +1 point to 75.6% LF.

Austrian Airlines (AUL) will add three new destinations to its network this month as part of its "Focus East" strategy, which it credits with helping its return to profitability in 2007. The cities, Sochi and Nizhniy Novgorod in Russia and Baia Mare in Romania, bring to 48, the number of destinations in Central and Eastern Europe, and the (CIS) served from Vienna (VIE). But (AUL) still sees plenty of opportunity for growth, Executive VP, Rudolf Mertl told journalists assembled in Vienna. The airline, which turns 50 in April, would like to add "3 to 5 destinations per year" in the region, he said. The key to Focus East is that (AUL) often is flying into secondary destinations it can serve via its wholly owned Tyrolean Airways subsidiary, which operates as Austrian Arrows. With a mix of 58 turboprops and regional jets up to the F 100, Tyrolean is well suited for these markets, which tend to be too thin to attract low-cost carriers, contributing to higher yields, Mertl said. (AUL) has the leading position into Central and Eastern Europe in weekly connections (588) and destinations offered and the No 2 position in transfer traffic with a 16% share, trailing only Lufthansa (DLH)'s 21%. In total, 60% of (AUL) traffic at (VIE) is connecting.

Reflecting its focus on smaller markets, 66% of that transfer traffic is coming from or going to a secondary destination. Only 15% of connections are between big gateways, where competition is most intense. "We want to have the London - Odessa passenger," Mertl said. The focus on smaller, less served markets has helped make (AUL) the leader among Assn of European Airlines members in cross-border traffic yield, he claimed. As a complement to "Focus East," (AUL) is developing its Middle East network, with Riyadh and Jeddah coming online in August, bringing to 13 the number of destinations served, with 117 weekly connections from (VIE). Aiming to carry more high-yield travelers, (AUL) from late July will begin operating four A320s into the region, configured with 24 sleeper seats at 46-inch pitch and 102 economy (Y) seats.

May 2008: Austrian Airlines (AUL) flew 1.53 billion (RPK)s passenger traffic in April, down -4.2% from the year-ago month, against a -6.5% decline in capacity to 2.01 billion (ASK)s. Load factor rose +1.8 points to 76.2% LF.

Austrian Airlines Group (AAG) confirmed that Saudi-Austrian investor, Mohamed bin Iassa Al-Jaber wants to pull out of a deal to buy a 20% stake in the airline company, worth €150 million/$231.3 million.

(AAG)'s main shareholder, state holding company (OIAG), agreed terms with Al-Jaber in March to take the stake via a capital increase. Austrian media reported that Al-Jaber's attorneys sent a letter to (AAG) management informing them he wished to pull out after the carrier announced its deepened first-quarter loss of -€60.4 million.

Austrian (AUL) acknowledged receipt of the letter, but said it "resolutely rejects the allegations of intended misleading contained" therein. It claimed the letter "does not have any legal effect, as a withdrawal from the subscription agreements is not possible in that way" and that it "currently" is in talks with Al-Jaber's representatives "concerning the preparation of resolutions to be passed in the general assembly regarding the capital increase."

(AAG) currently has a market capitalization of around €350 million. A n upcoming shareholders meeting in Vienna should offer more details.

Lufthansa (DLH) is considering taking a stake in Austrian Airlines Group (AAG), according to a source close to the German carrier saying, "We are watching the value of Austrian (AUL)'s shares very closely, especially with the shareholders meeting scheduled for [today] in Vienna." In addition, "Financial Times Deutschland (FTD)" reported that (DLH) is awaiting "signs from Vienna" regarding the possibility of purchasing shares, but denied that there are any concrete negotiations. However, there already have been discussions between (DLH) and (AAG) management. (AAG) (CEO), Alfred Oetsch is under enormous pressure to come up with new options for the financially troubled carrier, especially now that Saudi-Austrian investor, Mohamed bin Iassa Al-Jaber is looking to pull out of his deal to acquire 20%. Oetsch released a statement saying that "the reasons given" for Al-Jaber's attempted exit "are not comprehensible for us in any way" and that "we expect . . . Al-Jaber to comply with the contract. If this should not take place, we shall undertake appropriate steps in order to preserve our rights." Al-Jaber and his representatives apparently accused (AAG) of "deception," which Oetsch claimed "is astonishing, as the investor still intended to increase his commitment by a further +4.9%, taking advantage of the low share price, in the knowledge of the already disclosed results of the first quarter of 2008." (AAG) suffered a -€60.4 million/-$93.4 million first-quarter loss. Oetsch said the airline's strategy and focus on growth in Central and Eastern Europe and the Middle East "is neutral to questions of ownership" and will not change. (FTD) reported that (DLH ) considers Austrian (AUL)'s Eastern European network to be one of the latter's most attractive assets.

Employees = 8,582.

(IATA) Code: OS - 257. (ICAO) Code: AUA - AUSTRIAN.

Austrian Airlines (AUL) Group (CEO), Alfred Oetsch, under significant pressure following a steep first-quarter loss and the potential loss of a critical new investor, told Austria's "OR"F radio that a shift from the airline's "standalone" strategy has become a possibility and that it now will consider partnering with a foreign carrier. "If no signs of improvement in the financial situation are on the horizon, a solution could be to bring in a strategic partner carrier," he said. Meanwhile, talks with disgruntled future investor Mohamed bin Iassa Al-Jaber continued, although they are "surrounded by a gloomy atmosphere on both sides," a manager close to the situation said.

Later, Austrian Airlines Group (AAG)'s talks with potential investor, Mohamed bin Iassa Al Jaber collapsed, with Al Jaber saying he no longer has any interest in investing in (AAG). (CEO), Alfred Oetsch told "Austrian Radio" that he doesn't expect further negotiations with Al Jaber, but insisted the carrier will go ahead with a Middle East expansion. In a deal announced in March, Al Jaber said he would take a 20% stake in (AAG) at €7.10/$10.97 per share, substantially higher than current market value. However, he reconsidered after the airline posted a first-quarter (EBIT) loss of -€50.1 million, much worse than expected. While Oetsch has talked bravely about moving on absent the investment, the carrier's fleet is aging and it is believed that a financial infusion is necessary by 2010 for a fleet upgrade.

Calidris said it reached a deal with Austrian Airlines (AUL) to provide its Revenue Integrity solution to identify and eliminate false and duplicate bookings.

The Austrian government, which holds 38% of Austrian Airlines (AUL) Group (AAG) via state holding company (OEIAG), demanded that the carrier determine whether it will continue as a standalone enterprise or look to align with a strategic partner such as Lufthansa (DLH) or Air France (AFA)/(KLM). A survival plan should be presented this summer, or by autumn at the latest. (AAG), which has debts of close to €1 billion, has been hit by high fuel prices, a relatively old fleet (average 9.2 years) and high employee costs. It lost -€60.4 million/-$94.7 million in the first quarter.

(AUL) will launch its Premium Service A320 business class (C) product July 15 on flights to Damascus and Astana.

June 2008: Austrian Airlines (AUL) Group (AAG) issued a profit warning projecting a loss of up to -€90 million/-$141.8 million in 2008 owing to high fuel costs and tough competition. The carrier revealed that it has hedged only 20% of the fuel it will require this year. (AAG)'s board hired Boston Consulting to help it develop a survival strategy, with a particular focus on finding a "strategic partner" that could take partial ownership of the Austrian flag carrier. Currently, state holding company (OEIAG) owns a 38% stake, but is willing to lower its holding to 25% if the right investor can be enticed. Lufthansa (DLH) and Aeroflot (ARO) have shown interest in (AAG). (DLH) Chairman & (CEO), Wolfgang Mayrhuber said that the German carrier is not actively seeking to purchase stakes in other airlines. Any merger should make sense for both parties and should happen in a "friendly way," he said, adding that (AAG)'s board must decide on its future direction before (DLH) could get involved. Aeroflot (ARO) (CEO), Valery Okluev said (ARO) would "consider what is going on with (AAG)" but made no definitive statements.

Austrian Airlines Group (AAG) (CCO), Andreas Bierwirth said (AUL) is considering establishing an even greater presence in Central and Eastern Europe. It already holds a 22.5% share in Ukraine International Airlines (UKR) and would strengthen its foothold with investments in other carriers in the region. "If (AAG) is earning positive results and we have enough cash available, then we can be more active in this region," Bierwirth said. He claimed Austrian (AUL) will be more assertive in the region. "Even with our share in (UKR), other airlines grew as well. But, if an airline can spark consolidation in Eastern Europe, (AAG) can do it." He expects (AUL) to add up to eight new destinations in the region during the next two timetable periods.

Meanwhile, (AAG) faces tough competition at home from Low Cost Carriers (LCC)s. It has said it may lose as much as -€90 million this year, and is willing to consider investment by a larger strategic partner. "So far, (AAG) hasn't really reacted" to low-cost competition, Bierwirth admitted. "For example, we are under attack on 31 routes from (LCC)s in Zurich, where Swiss (CSR) is just affected on 11 routes." Launching its own low-cost operation is not a viable option at the moment, although its Lauda Air (LAL) leisure subsidiary might offer an outlet. He said Lauda (LAL) "is very successful" selling seats online and that it may be used on more price-sensitive routes such as to Innsbruck or Berlin.

July 2008: Austrian Airlines Group (AAG), including Austrian Arrows and Lauda Air (LAL), flew 1.75 billion (RPK)s traffic in June, down -3.1% year-over-year, against a -1.2% fall in capacity to 2.34 billion (ASK)s. Load factor dropped -1.5 points to 74.8% LF.

Austrian Airlines (AUL) will cut winter schedule capacity by -5% (ASK)s from its original plan, and will remove three airplanes from its fleet next year as part of its effort to negotiate "the current crisis in the aviation industry," it said. Service to London City will end August 18 and flights to Chicago O'Hare (ORD) will end at the conclusion of the summer schedule. Other "targeted" reductions will occur in Europe over the winter. "The necessary personnel adjustments can be achieved through fluctuation and by putting a stop on new appointments," (AUL) said. CEO, Alfred Oetsch said the airline will continue to concentrate on "the growth markets of Central and Eastern Europe and the Middle East, which are a fundamental strength and competitive advantage." Long-haul capacity will fall -21% as (ORD) is removed from the network and frequencies to Mumbai, New York (JFK), and Washington Dulles are cut. In Europe, it will continue to serve London Heathrow and will reduce frequencies "primarily in Western Europe." Oetsch warned, "Should the aviation crisis worsen, however, we shall be forced to take further measures."

The Austrian Airlines (AUL) Group (AAG) said that it will cut overall capacity by -5% for the coming winter season. Citing high fuel prices and weak demand, (AAG) said it will close its double-daily Vienna (VIE) - London City service from August 18. In the winter, (VIE) - Chicago O'Hare flights will cease, and frequencies from (VIE) to New York (JFK) and Mumbai will be reduced. Its fleet will be lowered by three airplanes in 2009. It did not announce any layoffs but warned that further cost-cutting actions could become necessary in the future.

Austrian Airlines (AUL) reached agreement with AeroLogic (AGC), the Lufthansa Cargo (LUB)/DHL cargo joint venture, to train its pilots (FC) for type ratings for the 777-200F.

August 2008: Austrian Airlines (AUL) flew 1.93 billion (RPK)s traffic in July, down -2.9% year-over-year, against a -3.3% decline in capacity to 2.42 billion (ASK)s. Load factor rose +0.3 point to 79.6% LF.

Austrian Airlines Group 2nd quarter = net profit of +$18 million (+$12 million).

Austrian Airlines Group (AAG) (CCO), Andreas Bierwirth said that the carrier, which continues to pursue privatization, plans on increasing its focus on the Middle East. He said the (AAG) is looking to be a "leading player" in the region. Bierwirth was in Syria presenting Austrian's new 24-seat Premium Service A320, which will be dedicated to service to the Middle East and Central Asia. Four of the airplanes will be introduced this year, followed by two more in 2009, for flights to destinations like Dubai, Cairo, Tehran, Damascus, and Astana. Each A320 reconfiguration costs around €1.5 million/$2.3 million. Two will feature extra fuel tanks for longer routes such as Dubai. (AAG) sees big potential in the region and Bierwirth said any destination within the Vienna - Dubai radius "fits our focus." Austrian (AUL) plans to return to Aleppo, add new destinations in Central Asia, introduce widebodies on flights to Tel Aviv, and increase frequencies on existing routes. He said the strategy is an important element in the company's effort to find a strategic investor this year.

Meanwhile, it will continue to look at reducing its long-haul service and is considering Delhi, Mumbai, Beijing, and Tokyo Narita for potential frequency cuts. "There is a 30% possibility that we will have to implement more reductions on the long-haul network, but I will do everything I can to avoid dropping another destination," Bierwirth said. Regarding the fleet, he said eight long-haul airplanes without an investor, or "maybe up to 14 in a strong partnership," is Austrian Airlines (AUL)'s target. Either way, its future long-haul network will focus on major Star (SAL) alliance hubs.

The Austrian government's Council of Ministers issued the contract for the privatization of Austrian Airlines Group (AAG) to state holding company (OIAG), entitling it to sell the entirety of its 42.75% stake. The contract stipulates that Austrian (AUL) interests must hold 25% plus one share. Merrill Lynch has been appointed as exclusive financial adviser in the potential sale of (OIAG) shares to a strategic partner

(AAG) took another step toward privatization, when state holding company (OIAG) was given the green light by the government to pursue an equity partnership, although at least 25.1% must be held by private investors within Austria. The company is hoping to finalize the process by November, and Lufthansa (DLH) and Air France (AFA) have been floated as potential partners. Bierwirth said up to seven carriers are on a shortlist (AAG) will present to (OIAG).

Turkish Airlines (THY) (CEO), Temel Kotil told Turkish TV network "CNBC-e" that (THY) is "interested in principle in the stake sale of Austrian Airlines (AUL)," but that it has "not taken a decision on this," "Reuters" reported. He also said it is interested in the 49% stake currently being offered in Bosnia's (B&H) Airlines.

Lazard has been hired by Air France (AFA)/(KLM) to advise it on a possible acquisition of Austrian Airlines (AUL), a Lazard spokesperson told "Thomson Financial." Companies interested in purchasing state holding company (OIAG)'s 42.75% stake in (AUL) have until August 24 to announce their intentions. S7 Airlines (SBR) sent a letter to state holding company (OIAG), expressing its interest in bidding for the stake, "ORF" television reported. S7 (SBR) rival Aeroflot (ARO) declined to bid.

Lufthansa (DLH), which has been considered the prohibitive favorite to become Austrian Airlines (AUL)'s strategic investor and savior, was the only carrier to confirm its participation in Austrian (AUL)'s privatization, although other airlines are thought to have registered their interest before the deadline. Austrian state holding company (OIAG) had given prospective investors some more time to declare their intentions to bid for its 42.75% stake, and possibly more. A (DLH) spokesperson told "Bloomberg News" that the German company "has expressed its interest," (OIAG) declined to reveal how many carriers presented bids, although Russia's S7 Airlines (SBR) told "Bloomberg" it is "indeed considering participating in the contest, but we cannot comment on whether we have actually placed a bid." (S7) (SBR) told "Reuters" that it is "interested in (AUL) from the point of view of business development as well as its international component."

Lufthansa (DLH) is in "constructive negotiations" with SN Airholding, parent of Brussels Airlines (DAT)/(EBA), about an equity investment worth 45% of the Belgian company with an option to take it over fully later. The confirmation follows speculation of a tie-up last spring after Chairman, Etienne Davignon acknowledged that (DAT)/(EBA) was negotiating an alliance membership and stated without naming (DLH) that "a possible financial participation of a new shareholder could only be considered under the condition that the sustainable future, the identity and the autonomy of Brussels Airlines (DAT)/(EBA) are guaranteed." The airlines said in a joint statement that negotiations are intended to produce "a collaboration with Brussels Airlines (DAT)/(EBA) as a self-dependently operating airline within the Lufthansa (DLH) affiliated group." Negotiations are expected to conclude "over the next few weeks." (DLH) would acquire 45% of (DAT)/(EBA) Airholding for about €65 million/$95.6 million through a capital increase and hold an option for the remaining 55% that could be exercised after two years. The price would be linked to (DAT)/(EBA)'s performance.

The Virgin Group (VAA) is (DAT)/(EBA)'s largest shareholder at 29.9% as a result of the merger of Brussels-based Low Cost Carrier (LCC) Virgin Express with full-service competitor SN Brussels Airlines (DAT) in 2006.

(DLH)'s interest in Brussels Airlines (DAT)/(EBA) coincides with its confirmed interest in bidding for the Austrian government's stake in Austrian Airlines (AAL) Group. (DLH) also is talking with (TUI) Travel (TUG) and the Thomas Cook Group (JMA) about a possible three-way combination of their low-fare subsidiaries.

Air France (AFA)/(KLM), Turkish Airlines (THY), Air China (BEJ), and Aeroflot (ARO) are among the airlines that have been linked with the Austrian (AUL) stake in recent weeks.

Austrian Airlines Group (AAG) announced the flotation of 57.1 million new bearer shares. The subscription period ends September 8. New shares will be issued with full subscription rights of the existing shareholders, and those shares not allocated to existing shareholders will be allocated to Mohamed bin Iassa Al-Jaber in an amount corresponding to 20% of the company's shares after taking into consideration the subscription rights exercised by existing shareholders, (AAG) said. Al-Jaber pulled out of his deal to invest in (AUL) in May, but the company said that it "will abide by the contractual agreements and the resolutions passed by the annual shareholders' meeting that provide for a capital increase to be carried out." It said failure to implement the capital increase would "represent a breach of contract." It said it was unsure whether Al-Jaber would participate.

September 2008: Austrian (AUL), now up for sale, posts surprisingly good second quarter (Q2) financial numbers; indicates its restructuring plan is bearing fruit.

Austrian Airlines (AUL) said it completed its previously announced rights offering of up to 57.1 million shares. As expected, Mohamed bin Iassa Al-Jaber did not participate in the offering. As a result, 2.45 million new shares with a value of €7.35 million/$10.5 million were issued, boosting the number of shares outstanding to 88.1 million, and increasing share capital from €257 million to €264.4 million. In a statement, the airline said, "By carrying out purchase offer, Austrian Airlines (AUL) AG has fulfilled all the contractual obligations necessary for the assertion of its claims against Mr Al Jaber. As a listed company, [it] is required to maintain the claims of its shareholders. Therefore the company will now consistently take the next steps necessary." Austrian (AUL) has said previously that it may sue Al Jaber for breach of contract.

Austrian Airlines (AUL) inaugurated the third training center at its Vienna Aviation Campus. Designed by ARGE BWM Architects and Partners, the center will enable (AUL) to train staff at a single location.

The Austrian Airlines Group (AAG) ordered four Bombardier Dash 8-Q400 NextGens plus two options. Firm orders are worth $118 million at list prices and are due for delivery in 2010. They will be operated by Tyrolean Airways under the Austrian Arrows brand. Arrows currently operates 12 Dash 8-Q300s, 10 Dash 8-Q400s, and 12 CRJ-200LRs. (AAG) also purchased four Dash 8-Q400s from the (SAS) Group and will phase out its last two Dash 8-300s, and two CRJ-200s.

October 2008: The Austrian Airlines Group (AAG) flew 1.77 billion (RPK)s traffic in September, down -2.6% year-over-year, against a -1.3% fall in (ASK)s to 2.27 billion. Load factor declined -1 point to 78.1% LF.

The Austrian Airlines Group (AAG) reported a -€16.4 million/-$20.5 million net loss in the third quarter, reversed from a +€29.2 million profit in the year-ago period, but said it is "confident" that its delayed privatization "can be finished in a positive way." (CEO), Alfred Oetsch confirmed that "measures which would have to be implemented in case of a [privatization] failure, will not be initiated yet because the chance for a successful privatization is still there and cutbacks could have counterproductive effects." State holding company (OIAG) was due to announce a buyer for its 42.75% stake, but could not reach an agreement with sole bidder Lufthansa (DLH) and delayed the sale until year end.

Meanwhile, the company is struggling and said the current quarter "will be characterized by an abrupt slump in demand, negative effects from fuel hedging, and the increase in value of the USA dollar," adding that the faltering economy already has led to a decline in bookings. It expects a full-year net loss before special items, of -€100 TO-€125 million. Third-quarter revenue rose +1.4% year-over-year to €697.2 million, and (EBIT) swung to a -€9.4 million loss from a +€36.2 million profit in the third quarter of 2007.

The group's airlines carried 3.2 million passengers in the quarter, down -3.1%, and load factor dropped -0.5 point to 77.6% LF. It said unit revenue rose +3.8% and revenue from scheduled flight operations was up +3.2% to €588.3 million, thanks to "the systematic continuation of the group's expansion in the core markets - - (CEE) and the Middle East - - which generated a disproportionately high increase in flight revenue." Nine-month net loss of -€65.1 million compared to a +€20.6 million profit in the year-ago period. (EBIT) also fell into the red, to a negative -€34 million from a positive +€33.3 million.

Austrian (AUL) announced the cancellation of its Vienna - Mumbai 767 service on March 1, owing to "drastic overcapacity" between Europe and the Indian city.

The (AAG) launches 4x-weekly, Vienna - Amman flights on May 6 aboard a Premium Service A320.

The (AAG) issued a new forecast "based on the already observed as well as expected declines in bookings," and now is expecting a 2008 net loss before special items of -€100 to -€125million/-$134.5 to -$168.1 million. It predicted a -€70 to -€90 million loss in July. It said that "noticeable consequences for the aviation industry, due to the general financial and economic crisis, are also expected for the coming months" and that lower fuel costs would not compensate for sales-related revenue losses.

The (AAG) is reducing capacity by -5% during the winter season, but plans no further cuts, a spokesperson said, adding that the company continues to insist that its planned privatization move forward without delay. State holding company (OIAG) has offered its 42.75% stake up for bid and will "set the schedule," the spokesperson conceded.

Lufthansa (DLH) Technik (LTK) Budapest reached a three-year agreement with Austrian Airlines (AUL) to provide heavy maintenance checks on 20 A320s.

The Austrian government's effort to privatize Austrian Airlines Group (AAG) hit a snag as Air France (AFA)/(KLM) withdrew its interest, while Lufthansa (DLH) and S7 Airlines (SBR) declined to make formal bids by the deadline and requested more time. State holding company (OIAG) had intended to announce the winning bidder on October 27 and had targeted the end of the month to find a buyer for its 42.75% stake, with the Franco-Dutch, German and Russian companies emerging as frontrunners.

An (AFA)/(KLM) spokesperson told "Reuters" that the company "did not send a binding offer to the Austrian authorities for the acquisition of Austrian (AAG) but did send a letter reaffirming its interest in continuing talks," adding that despite complementary networks, "the economic and financial climate coupled with the proposed scheme did not allow us to make a binding offer."

Austrian issued a warning projecting a heavier full-year loss than the one forecast over the summer. (OIAG) reportedly was asking approximately €5 per share.

Meanwhile, both (DLH) and S7 (SBR) want an additional two months before deciding on whether to present a bid, a source close to the process said, citing current market and economic conditions and (AAG)'s precarious financial situation. "Agence France Presse" reported that (DLH) had decided to present an offer, but the company would not comment.

Lufthansa (DLH) was the only carrier to confirm its interest in bidding for the Austrian Airlines Group (AAG) by the deadline, Austrian competition authorities confirmed. However, the sale of the state's stake in the flag carrier remains up in the air following the suspension of (AAG)'s shares and owing to (DLH)'s resistance to paying the full asking price. "Due to the current economic developments at Austrian Air (AUL) and obviously differing negotiation positions, the success of the transaction is in question," the Austrian Takeover Commission said in a statement cited by "Bloomberg News."

Lufthansa (DLH) is due to submit its offer, and Austrian takeover law requires a company bidding for at least 30% of an entity to make an offer to the remaining shareholders. Austrian state holding company (OIAG) owns 42.75% of the (AAG). The winning bidder was scheduled to be unveiled on October 27. But (DLH) has hinted that owing to Austrian (AUL)'s troubled financial situation and (DLH)'s promise to safeguard jobs and (AUL)'s Vienna (VIE) hub, it should pay a reduced rate for (OIAG)'s shares.

A source close to the Lufthansa (DLH) board said that it would maintain Austrian (AUL)'s (VIE) hub for at least 30 years, but also warned that if the sale does not go through and if (AUL) leaves the Star Alliance (SAL), (DLH) will launch negotiations with Austrian Low Cost Carrier (LCC) Niki (NKI) to become an investor and compete with Austrian (AUL).

Neither Air France (AFA)/(KLM) nor S7 Airlines (SBR), both shortlisted finalists, expressed interest in making a formal bid.

Later, Austrian state holding company (OIAG), which owns 42.75% of the troubled flag carrier, delayed Austrian Airlines Group (AAG)'s privatization until year end in order to attract better offers.
Lufthansa (DLH) was the only official bidder, but it said it was willing to pay just €360,000/$454,090 for (OIAG)'s stake, or €0.01 per share. Other shareholders would receive €3 to €4 per share under terms of (DLH)'s offer and the Austrian government would have to assume €500 million of (AAG)'s €900 million debt.

(DLH) remains interested in discussing an offer with (OIAG), as does Russia's S7 (SBR) Airlines, which originally had asked for a delay in the process. (OIAG) (CEO), Peter Michaelis said that Air France (AFA)/(KLM) is out of the running. To keep (AUL) flying, the Austrian government will look to inject €500 million, although such a move would require approval of European Union (EU) competition authorities.

(AAG) (CEO), Alfred Oetsch said during a news conference that no significant restructuring, such as phasing out airplanes or reducing the network, will be implemented until a new strategic investor is secured. But other (AAG) officials have said certain routes are losing too much money, with one saying that Vienna - Tokyo Narita loses up to €6 million monthly.

Austrian media are reporting that if (AUL) is not sold, it will have to ground its 767-300ERs and axe long-haul routes in order to stay afloat. Its regional network could be pared as well, forcing the grounding of CRJs and the dismissal of up to -2,000 employees.

November 2008: The Austrian Airlines Group (AAG) will run out of cash by mid-2009 at the latest, if it is unable to find a new owner or secure funding from the Austrian government, which was asked by Lufthansa (DLH) to take responsibility for a significant portion of (AAG)'s debt, in exchange for a German takeover. Analysts from Austrian banks now predict a 20% chance of bankruptcy. While (AAG) has said it can continue operations with more cuts, (CCO), Andreas Bierwirth said that employees are "full of fear about the future."

Meanwhile, Air France (AFA)/(KLM) Chairman & (CEO), Jean-Cyril Spinetta sent a letter to state holding company (OIAG) saying it is interested in presenting a bid, if the Austrian government assumes €500 million of (AAG)'s debt. Austrian media is speculating that (AFA)/(KLM) is hoping that (OIAG) will extend the privatization process beyond this year.

Later, Austrian state holding company (OIAG) said that it "will only hold concluding talks with Lufthansa (DLH)" regarding the privatization of Austrian Airlines Group (AAG) and that S7 (SBR) and Air France (AFA)/(KLM) are no longer in the bidding process." (OIAG) now holds 41.6% of Austrian (AUL). According to press reports, (OIAG) indicated that S7's bid did not conform to EU specifications and (AFA)/(KLM)'s did not arrive in time. (DLH) reportedly has offered approximately €360,000/$451,609 for (OIAG)'s stake and has asked the Austrian government to assume some €500 million of company debt. (OIAG)'s board is scheduled to meet on December 5, by which time it expects to have reached an agreement with (DLH).

Air France (AFA)/(KLM) remains interested in acquiring 20% to 25% in the new Alitalia (ALI) as well as the Austrian government's 41.6% stake in Austrian Airlines (AUL) Group (AAG), Chairman & (CEO), Jean-Cyril Spinetta confirmed. "We would be willing to invest about €200 million/$253.8 million [in Alitalia (ALI)] through a capital increase," he said. The Compagnia Aerea Italia (CAI) investor group, which was cleared by the Italian government to take over (ALI) for €1.05 billion, has not announced its choice of international partner. The new airline, which will incorporate Air One (ADH), reportedly may be ready to commence operations as early as December 1. "Everything is still very imprecise," Spinetta said, noting that "negotiations have not yet started . . . But yes, I meet regularly with (CAI) and [head] Roberto Colaninno, and I'm sure they do meet with others too."

Both Lufthansa (DLH) and British Airways (BAB) have expressed their interest. Alitalia (ALI) said it is reducing domestic and short-haul international flying, citing ongoing labor unrest as well as administrative issues related to the transfer to (CAI). Employees must be placed on unemployment before being rehired by (CAI). (ALI) said its intercontinental flight schedule will be "nearly unchanged." It did not specify how many flights will be cancelled. The (ALI) unions that have not accepted either new work conditions offered by (CAI) or redundancy payments, agreed to postpone a strike.

Meanwhile, Spinetta also conceded he was "a bit surprised" by reports that Lufthansa (DLH) asked the Austrian government to assume €500 million of (AAG)'s debt as part of its takeover proposal. The state holding company (OIAG) stated it will negotiate exclusively with (DLH). "Legal conditions were apparently changed," Spinetta said. "I informed the Austrian government that if a new bid would be launched, we would consider participating." He said that a legal challenge would be "an option" if Austria assumes the debt. (OIAG) defended its position, saying that (AFA)/(KLM) never made a formal offer as (DLH) did, sending only two letters regarding its interest in the stake, the "Financial Times Deutschland" reported.

December 2008: The Austrian Airlines Group (AAG) flew 1.31 billion (RPK)s traffic in November, down -6.7% year-over-year, against a -5.7% drop in capacity (ASK)s to 1.81 billion. Load factor was down -0.8 point to 72.8% LF.

Lufthansa (DLH)'s supervisory board approved the acquisition of the (AAG), starting with the purchase of state holding company (OIAG)'s 41.56% share for €366,000/$463,000. (DLH) said it also will issue a debtor warrant potentially worth up to €163 million, "depending on Austrian Airlines (AUL)'s economic performance and the (DLH) share outperforming its competitors." (DLH) then will make a €215 million bid for (AUL)'s remaining shares at €4.44 per share, subject to approval from Austrian competition authorities. The per-share price equals the average weighted market price over the past six months. "Gaining the support of our supervisory board for the acquisition of (AUL) is an important step which paves the way for (OIAG), the government in Vienna, and the European Commission (EC) to make their decisions following due consideration of the transaction," (DLH) CEO, Wolfgang Mayrhuber said. "Our bid is fair," he added. "It takes the interests of all those concerned into account and shares the encumbrances and risks fairly. The consequences of the financial markets crisis and its effects on the real economy, also have a major impact on the aviation industry. Structural changes increase the likelihood of (DLH) and (AUL) sharing a brighter future."

The offer remains contingent upon the Austrian government assuming €500 million of (AAG)'s approximately €900 million debt, (DLH) holding 75% of all (AAG) shares at the conclusion of the unspecified acceptance period for the public takeover bid and (EC) approval. (OIAG) is expected to meet and confirm the deal.

Austrian state holding company (OIAG)'s supervisory board approved the sale of its 41.56% stake in (AAG) to (DLH) for €366,268.75/$464,865, continuing (DHL)'s aggressive European shopping spree. (DLH) approved the transaction and will make a €500 million payment to cover a portion of (AAG) debt in exchange for a debtor warrant worth up to €162 million that will depend on (AUL)'s "economic development" and (DLH)'s share price relative to competitors after three years, the companies confirmed. Next spring, (DLH) will submit a takeover offer to all (AAG) remaining shareholders of €4.44 per share.

(OIAG) (CEO), Peter Michaelis called the sale "the right decision" that will "consolidate" (AUL)'s status "as a leading carrier in Central and Eastern Europe" while allowing it to "remain a legally independent company" with its own brand, crew, fleet and Austrian identity. "Only by combining our powers can we hope to find an answer to the global challenges currently facing our industry," (DLH) Chairman & (CEO), Wolfgang Mayrhuber said, calling the (AAG) acquisition "another step along this path." (DLH) said it expects approximately €80 million in annual synergies to result from the merger and that (AUL) will return to profit in around three years. No long-haul cutbacks are planned, but Mayrhuber did stress that a "profitable job is a secure job" and that (DLH) "cannot make promises" regarding employees, owing to the current industry downturn. It will try to maintain staffing levels. "We came to Austria to invest for a long-term period. We are here to make money."

Vienna will be (DLH)'s preferred hub for routes to Central and Eastern Europe, while Zurich (Swiss International Air Lines (CSR)) and Brussels (Brussels Airlines (DAT)/(EBA)) will be the centers for its African operations.

(AUL) (CEO), Alfred Oetsch said the combination "removes our structural weaknesses, such as a lack of international sales strength and disadvantages in purchasing. Together with our own measures, this will enable the almost total retention of our network strength." He called (AAG)'s financial situation "serious".

(AUL) (CEO), Alfred Oetsch said that the carrier is expecting a "single-digit" drop in passengers next year and that further adjustments in capacity and costs are possible if demand continues to fall, including moving some workers to part-time status, but he ruled out layoffs. However, he said the company is facing declining traffic "in all classes" and that while its key routes to Eastern Europe are being affected, they are not hurting "as strong compared to other areas." The outlook has not damaged (AAG)'s value, with Austrian takeover authorities setting the per-share price that (DLH) will offer (AAG) shareholders at €4.49, up from the original €4.44. (AAG) shares have risen +34% since (DLH)'s offer was announced, but the new price still is +26% higher than its closing price, "Reuters" reported.

January 2009: Austrian Airlines (AUL) flew 1.19 billion (RPK)s traffic in December, down -6.5% from the year-ago month. Capacity dropped -6.9% to 1.71 billion (ASK)s, lifting load factor +0.3 point to 69.7% LF.

The European Commission (EC) authorized what it called "rescue aid" for the Austrian Airlines Group in the form of a €200 million/$265.2 million loan facility guaranteed by Austrian state holding company (OIAG). The (EC) said the loan was issued at market rates and the amount was limited to what is needed to maintain the company ahead of its privatization. "The decision deals only with a short-term measure to tackle liquidity problems that (AUL) has encountered as a result of the financial crisis and does not concern the planned sale of (AUL) to Lufthansa (DLH) or the long-term plans of the airline, which have also been notified to the (EC) by Austria as possible state aid and are still being examined," the (EC) said.

(AUL) is to expand its medium-haul "Premium Service" to include the Jordanian capital, Amman. The four-times weekly connections will be launched in May 2009 and will be operated by one of (AUL)'s four A320's to be fitted with a business-class (C) cabin. (AUL) already offers this "Premium Service" on flights to Dubai, Damascus, Astana, Tehran, Cairo, Erbil, Riyadh, and Jeddah.

(AUL) has found places in its network for two 767-300ERs made available through a reduction in service to Mumbai and Chicago O'Hare. One will operate on (AUL)'s daily, Vienna (VIE) - Tel Aviv service beginning this spring, while the other will fly on its 6x-weekly, (VIE) - Dubai (DXB) service beginning March 1, increasing capacity on the route by +20%. Five additional flights to (DXB) are operated with A320s or 737-800s.

(AUL) will resume 3x-weekly, Vienna - Aleppo service on March 29 aboard an A320.

Austrian Airlines Group (AAG) (CEO), Alfred Oetsch resigned. He left the company on January 31, which would make him the shortest-tenured (CEO) in the carrier's history. He took over in May 2006. (COO), Peter Malanik and (CCO), Andreas Bierwirth will fill in for Oetsch temporarily and Austrian media are speculating that Swiss International Air Lines (CSR) Chief Network & Distribution Officer, Harry Hohmeister could succeed Oetsch, 55, who said the company's takeover by Lufthansa (DLH) necessitated a new start on the personnel side. (CSR) and the (AAG) both are Lufthansa (DLH) subsidiaries. "This step is designed to enable a new beginning at the company, including at the level of management," Oetsch said. "I am glad that the privatization has now moved into its final stages with Lufthansa (DLH), the best possible partner for the Austrian Airlines Group."

Meanwhile, the situation at (AUL) continues to deteriorate. Sources close to the carrier have indicated a double-digit year-over-year drop in January passenger traffic, and one said that 1,000 to 2,000 employees may lose their jobs. (AAG), which employs some 8,000, would not comment on potential cuts.

February 2009: Austrian Airlines (AUL) flew 1.16 billion (RPK)s in January, down -12.2% from the year-ago month. Capacity dropped -6.5% to 1.78 billion (ASK)s, lowering load factor -4.3 points to 65.4% LF.

The Austrian Airlines Group (AAG) is facing massive challenges to liquidity, with (COO), Peter Malanik saying "Demand is collapsing and the outlook offers very little reason to be optimistic." He added, "We expect to see a reduction in revenue of up to -15% at the (AAG) in 2009, equivalent to approximately €225 million/$294.4 million." The announcement came after the dismissal/resignation of CEO, Alfred Oetsch. The (AAG) will reduce production by a further -5% and implement a range of temporary measures to compensate for the anticipated collapse in revenue. "We retain sole responsibility for our own actions in every regard as an airline in the Lufthansa Group, and must overcome the current crisis single-handedly as a result," Malanik said.

Capacity this year now will fall -10% (ASK)s and flights to Mumbai (from February 1), Burgas (from the end of March) and Baia Mare (from February 16) will be dropped. Frequencies will be cut on a variety of routes. The (AAG) said the capacity reduction will produce cost savings of approximately -€115 million.

The (AAG) will seek an additional -€110 million in savings from labor. The (AAG) will negotiate cuts in holiday leave, temporary salary reductions, more flexible work hours and suspension of pension contributions with employee representatives. The (AAG) must improve its result by "approximately €200 million, to be achieved in stages by 2012. Only then would we have an (EBIT) margin of approximately 6% to 7%, the level usual amongst European carriers, and a solid foundation for future growth in the group," (CCO), Andreas Bierwirth said. Savings also will be sought from corporate restructuring and suppliers. "Our partners at the Vienna location will also have to make a significant contribution," he warned.

Time is running out for the Austrian Airlines Group (AAG), which announced that it lost at least -€131.5 million/-$166.1 million through 2008 and January 2009, or half of the total value of its shares. "The announcement of the loss was no surprise for us," (AAG) board member, Peter Malanik said. But the company's ultimate survival depends on the closing of its takeover deal with Lufthansa (DLH), which must be completed by July in order for (AAG) to ensure its viability.

The European Commission (EC) has opened a formal investigation into the tie-up, warning that it has "doubts." The merger also may fail if Austrian requires more money than the €200 million short-term loan guaranteed by state holding company (OIAG). If that occurs, (DLH) may determine that the (AAG) no longer is viable and could back out of the deal.

(AUL) will save approximately -€115 million owing to a -10% capacity cut this year. The group will phase out three Dash 8-Q300s and three CRJ-200s in 2009, eventually replacing the lift with four Dash 8-Q400s. The moves are part of a -€225 million savings program that, "according to our statistics . . . should be enough" until (DLH) takes over, Malanik said.

Board member Andreas Bierwirth explained that part of Austrian's problem is a once-successful strategy that now has become a liability. "No other carrier in Europe depends so much on transfer traffic like (AUL). Worldwide, it is just Emirates (EAD) and Singapore Airlines (SIA) that have a similar share of transfer business," he said. In addition, (AUL) has been hurt by the economic downturn in Eastern Europe, where it has focused considerable resources in the past several years. Business (C) class traffic to/from those destinations fell -13% in January compared to the year-ago month.

Austrian Airlines Group (AAG) board members, Andreas Bierwirth and Peter Malanik told journalists in Vienna that the company lost at least -€131.5 million/-$165.5 million in 2008 and January 2009, or half of the total value of its shares. It now expects to release full-year financial results on March 13.

March 2009: Austrian Airlines (AUL) flew 1.06 billion (RPK)s traffic in February, down -17.8% year-over-year. Capacity dropped -14.2% to 1.53 billion (ASK)s and load factor fell -3 points to 69.1% LF.

The Austrian Airlines Group (AAG) reached an agreement with unions representing 2,600 ground workers (with a few exemptions) to implement reduced schedules and pay over the six months starting April 1. Hours and pay will be cut -20%/-10% or -10%/-5%. The (AAG) said it holds an option to extend the six-month period. In addition, pension fund contributions will be cut -75% for one year. The (AAG) said the move "is a very important step towards overcoming the crisis" and it is proceeding with negotiations with Austrian Airlines (AUL) and Tyrolean Airways cabin staff (CA).

The (AAG) promoted General Manager Americas, Paul Paflik to VP Ground Operations, effective July 1.

(AAG) executive board members, Andreas Bierwirth and Peter Malanik said Friday in Vienna that the company does "not have enough reserves to get through the crisis" that helped push it to a -€429.5 million/-$550.3 million loss in 2008, a reversal from the +€3.3 million profit in 2007 and the worst result in its history. The (AAG), which is awaiting approval of its acquisition by Lufthansa (DLH), must create a cost base for interim survival before putting itself in position "to be able to fit in enough to compete with the (DLH) Group's airlines, so we again can reach the strength to generate our own capital costs," Malanik explained. The (AAG) already has implemented a -€225 million savings program that may be extended if necessary.

Full-year revenue fell -0.8% to €2.53 billion, while expenses climbed +13.3% to €2.84 billion. (AAG)'s operating loss of -€312.1 million compared to a +€42.1 million profit in 2007. Passenger numbers slipped -0.9% to 10.7 million, and load factor was down -0.7 point to 74.4% LF. Flight revenue fell only "slightly" and operating unit revenue rose +5.1%, the company said, but a +31.5% surge in fuel costs to €581 million, plus one-time charges of €334.4 million, owing largely to airplane depreciation, were a "significant burden" on the result.

Austrian Airlines (AUL) continued enhancing its presence in Central and Eastern Europe and the Middle East, launched its premium A320 service and said it would continue to concentrate on promoting transit traffic through a focus on secondary markets with less competition. Transfer passengers comprised 60% of the total last year, while one-third of all passengers traveled to/from Eastern Europe.

Malanik and Bierwirth said Vienna eventually will be integrated into Lufthansa (DLH)'s hub network and that the company is hoping to enhance its long-haul profile through increased sales efforts in foreign destinations and schedule optimization between Austria and Europe. (AUL) expects annual synergies of €80 million once it joins the Lufthansa Group.

(AAG) executive board members, Peter Malanik and Andreas Bierwirth confirmed that the company does in fact possess sufficient liquidity to safeguard operations until its merger with (DLH) is approved and completed. However, the (AAG) does not possess the stability to survive long-term on its own, they said. (AAG) and (DLH) officials hope that the tie-up will be finalized before summer.

(AUL) currently operates 89 airplanes, having phased out six smaller RJs and temporarily grounded two A320s. "We would be able to park more than >10% of our total fleet if necessary," Bierwirth said.

(AUL) took delivery of its first 767-300ER retrofitted with blended winglets. It plans to have four of its six 767s retrofitted.

April 2009: The Austrian Airlines Group (AAG) flew 1.24 billion (RPK)s traffic in March, a -18.1% drop from the year-ago month. Capacity fell -14.3% to 1.72 billion (ASK)s and load factor was down -3.3 points to 72.1% LF.

(AAG) announced a one-year agreement with flight crew (FC) at both Austrian Airlines (AUL) and Tyrolean Airways that includes reduced work time and deferred compensation and constitutes an important step in its effort to cut costs by -€225 million/-$300 million. (AUL)'s executive board, the In-flight Works Council (IWC), the vida union and the aviation section of the Austrian Chamber of Commerce signed the deal. (AAG) already had reached an agreement with ground employees.

From June 1, current work time for approximately 2,000 flight attendants (CA) will be cut -10% and salaries will fall -5%, with the difference to be made up by the Austrian Public Employment Service. (AAG) said certain part-time employees will not have their hours reduced "in order to maintain social balance." Some 1,000 pilots (FC) will have compensation deferred by either 5% or 8.5% depending on the collective agreement under which they are working. (AAG) will reduce pension fund contributions by -75% retroactive to April 1.

COO, Peter Malanik said the deal constitutes a "crucial step forward in our efforts to overcome the present crisis . . . This package will now enable us to realize the cutbacks in staffing costs that are necessary and counteract the anticipated slump in revenue."

(IWC) Captain Georg Riedl claimed the agreement "shows clearly the willingness of the cabin staff (CA) to contribute their share to [AAG's] future," while vida Deputy Chairman, Wilhelm Haberzettl said the accord allowed the union to "avoid dismissals and further drastic measures in this critical time."

Austrian Airlines (AUL) as the Austrian national carrier, operates scheduled services to more than >130 destinations on all five continents.

Employees = 8,031.

(IATA) Code: OS - 257. (ICAO) Code: AUA - AUSTRIAN.

Parent organization/shareholders: Floating stock (47.94%); Lufthansa (DLH) (41.56%); OIAG (Austrian Government) (39.7%); & Austrian institutional investors (7.05%).

Owns: Lauda Air (LAL) (100%); Slovak Airlines (SLV) (62%); Austrian Arrows (100%); & Ukraine International Airlines (UKR) (22.5%).

Alliances: Star Alliance (SAL); Aeroflot-Don (DAU); Air China (BEJ); Air Dolomit (DLA); Air France (AFA); Air India (AIN); Air Mauritius (MAU); Air Moldova (MOL); AirBaltic (BAU); Azerbaijan Airlines (AHY); Belavia Belarussian Airlines (BLV); Bulgaria Air (LZB); Egyptair (EGP); El Al (ELA); Estonian Air (ENA); IBEX Airlines; Iran Air (IRN); (JAT) Airways; Job Air; KD Avia (KGD); Libyan Arab Airlines (LAA); Luxair (LUX); Macedonian Airlines (MCC); Montenegro Airlines (MNO); Rossiya Airlines (SDM); Royal Jordanian Airlines (RJA); South African Airways (SAA); Swiss; Syrianair (SYR); Tarom (TRM); Ukraine International Airlines (UKR); & Ural Airlines (URL).

Main Base: Vienna International Airport (VIE).

Hub: Innsbruck Airport (INN).

Domestic, scheduled destinations: Graz; Innsbruck; Klagenfurt; Linz; Salzburg; & Vienna.

International, scheduled destinations: Aleppo; Altenrhein; Amman; Amsterdam; Ankara; Athens; Baku; Bangkok; Barcelona; Bari; Mulhouse/Basle; Beijing; Belgrade; Berlin; Bologna; Bratislava; Brussels; Bucharest; Budapest; Cairo; Cancun; Chisinau; Cluj; Cologne; Colombo; Copenhagen; Damascus; Delhi; Dnepropetrovsk; Dresden; Dubai; Dusseldorf; Frankfurt; Fuerteventura; Funchal; Geneva; Gothenburg; Hamburg; Hanover; Helsinki; Holguin; Hurghada; Istanbul; Kathmandu; Kharkov; Kiev; Kosice; Krakow; Krasnodar; Kuala Lumpur; Larnaca; Las Palmas; Leipzig/Halle; Ljubljana; London; Luxembourg; Luxor; Lviv; Lyons; Madrid; Malaga; Male; Mauritius; Melbourne; Milan; Minsk; Montego Bay; Moscow; Mumbai; Munich; New York; Nice; Nuremburg; Odessa; Ohrid; Oslo; Ostrava; Paris; Phuket; Podgorika; Prague; Pristina; Puerto Plata; Punta Cana; Riga; Rome; Rostov; St Petersburg; Sarajevo; Shanghai; Sibiu; Singapore; Skopje; Sofia; Stockholm; Strasbourg; Stuttgart; Sydney; Tbilisi; Tehran; Tel Aviv; Tenerife; Thessaloniki; Timisoara; Tirana; Tobago; Tokyo; Toronto; Tripoli; Turin; Varadero; Varna; Venice; Verona; Vilnius; Warsaw; Washington; Yerevan; Zagreb; & Zurich.

For Austrian Airlines (AUL) airplane maintenance - - SEE - - "(AUL)-AUSTRIAN TECHNIK."
Austrian Technik:
Employs 1,200.
Performs airplane maintenance & engineering services; airplane weighing; avionics upgrades; calibration; hydrostatic testing; & line maintenance.

Austrian Airlines Group (AAG) confirmed that it will stay afloat until it is taken over by Lufthansa (DLH). (AAG) Executive Board member and (CCO), Andreas Bierwirth told shareholders that €90 million/$118.8 million is still available from the €200 million in aid granted by the Austrian government and that the amount will be sufficient until (DLH)'s acquisition of the struggling carrier is approved. "From our side, there is not much more to say" until the (EC) approves the merger, an (AAG) spokesperson said in Vienna. "Speculation in the media that the [money] will not be enough, that is not an issue for us." Rumors that (AUL) will be unable to repay the aid on time also are untrue, the spokesperson added.

Meanwhile, (AAG) continues to work on creating a cost base for interim survival. It already has implemented a €225 million savings program that may be extended if necessary. It is offering deals to attract more passengers, including a €999 return business class (C) fare that, if purchased this month, is good for travel May 15 through September 15.

Bierwirth said during the shareholders meeting that (AAG) is considering a charter cooperation between its Lauda Air (LAL) subsidiary and Germanwings (RFG).

May 2009: Lufthansa (DLH) said that its takeover offer for Austrian Airlines (AUL) has been accepted by "over 85%" of (AUL) shareholders including the 41.56% stake held by (OIAG) and "the syndicate of Austrian core shareholders" consisting of (LVBG), (RIG) and (WSV-AG) Vienna Insurance Group. The purchase is still subject to the approval of antitrust authorities and the provision of €500 million in restructuring aid by the Austrian government.

The Ukrainian government intends to sell its 62% stake in Ukraine International Airlines (UKR), according to a government statement cited by "Reuters." Existing shareholders Austrian Airlines (AUL) (22.5%) and the European Bank for Reconstruction & Development (10%) will have rights of first refusal.

June 2009: The Austrian Airlines Group (AAG) flew 1.38 billion (RPK)s traffic in May, down -18.8% year-over-year, against a -13.9% fall in capacity to 1.95 billion (ASK)s. Load factor slipped -4.2 points to 70.8% LF.

The (AAG) may have to extend its cost-cutting program aimed at reducing spending by -€225 million/-$314 million and will look for additional savings by lowering capacity and expanding work-hour reductions among other actions, Executive Board member, Peter Malanik said. The original cost-saving plan will not be enough owing to the severity and duration of the economic downturn, he explained. "We cannot say if, and maybe when, we [will] have to lay off people," he said. "We are in talks with the unions about possible solutions."

A source close to the carrier said that the (AAG) is evaluating the possible integration of seven 737-800s operated by subsidiary Lauda Air (LAL) into the mainline fleet. That would enable it to use the airplanes on flights to markets such as Barcelona and London Heathrow that likely would have higher load factors and lower seat-mile costs, the source said.

Leases on two 767-300ERs will expire soon and are not likely to be renewed, shrinking Austrian (AUL)'s wide body fleet to four 767-300ERs and four 777-200ERs. (AAG) will take "a close look at its operation to Delhi regarding economical performance," the source said, indicating that service may be dropped.

Lufthansa Systems (LHS) completed implementation of its GroundSolutions/Mobile check-in solution at Austrian Airlines (AUL), enabling passengers to check in via mobile phone.

(AUL) offered to reduce the size of its fleet in order to win approval from the European Commission (EC) for its acquisition by Lufthansa (DLH), state holding company (OIAG) (CEO), Peter Michaelis told "Format" magazine. In comments cited by "Reuters," Michaelis said (DLH) also offered to cut frequencies. "In [(ALA)'s] case, [the offer] is about the demand to cut (AUL) in size because of the state aid. In (DLH)'s case, [the offer] is about the antitrust conditions," he said.

The (EC) extended the deadline of its investigation into the takeover of the (AAG) by (DLH) by at least 14 days, or up to a maximum 90 days although a decision is expected to come in about two weeks. Sources close to both the (AAG) and the Austrian government said that a 20% reduction in (AUL)'s capacity may be a condition for approval and would be acceptable. (AUL) is considered to be too large for its home market, with or without (DLH). "If we have to deliver the bad news regarding a shrinking network, fleet and employees, it is [more comfortable for us] if it is announced by the (EU) and then we can blame the (EU). It reveals the cowardice of the politicians and, especially, the unions within the (AAG) that never allowed a staff reduction, which had been necessary," an (AAG) management source said.

Other conditions likely will involve the surrender of slots on (AUL)'s most profitable routes, such as Vienna (VIE) - Geneva, (VIE) - Frankfurt and flights to some Eastern European destinations. (AUL)'s charter business, operated largely by its Lauda Air (LAL) subsidiary, also could be cut by half.

(AAG) employs more than >7,900. Some 2,600 already are on short-time work, and it is expected that up to 1,000 will be laid off if and when the carrier shrinks. By comparison, Air Berlin (BER) employs 7,800 and transports around three times as many passengers (30 million to 10 million).

(DLH)'s acquisition of the (AAG), and the €500 million/$704.3 million in state aid that is part of the deal, require European antitrust approval.

July 2009: Austrian Airlines (AUL) flew 1.44 billion (RPK)s traffic in June, down -17.9% year-over-year. Capacity dropped -15.9% to 1.97 billion (ASK)s and load factor slipped -1.8 points to 73% LF.

The Austrian Airlines Group (AAG) confirmed that its Tyrolean Airways subsidiary, which operates under the Austrian Arrows brand, will reduce its fleet from the current 55 airplanes to 41 over the next year. A spokesperson said that the (AAG) will phase out 50-seat CRJs, which no longer are economical due to the decline in business demand, especially to Eastern Europe. All 10 CRJs and four of 14 Dash 8-300s will be removed. "This will affect a total of 400 full-time employees. Up to 280 are from Tyrolean," the spokesperson said. (AAG) will operate those routes with larger airplanes like Dash 8-Q400s or 737NGs in order to improve seat-mile costs. It will add one new Dash 8-Q400 this year and three more next spring. It has two unconverted options. Seven 737-800s from Lauda Air (LAL) likely will be integrated into the mainline fleet to fill the capacity gap. Lauda (LAL) mainly operates on leisure routes and could slash its charter operation by 50% or more to satisfy the European Commission (EC) investigation into the (AAG)'s planned acquisition by Lufthansa (DLH). "We are holding to our strategy of being a network carrier with a focus on the markets in Central and Eastern Europe. However, we must respond to the massive changes in the market. These changes are structural. We anticipate that demand for the high-price business (C) travel segment will remain weak in the coming years. We must adjust our fleet structure to this development," Austrian Executive Board Members, Peter Malanik and Andreas Bierwirth said in a statement.

Later, the European Commission (EC) said that (DLH)'s latest offer regarding its planned takeover of the Austrian Airlines Group (AAG) contains insufficient concessions, making it unlikely the (EC) can grant antitrust clearance for the deal by the end of this month. The (EC) on July 1 extended the deadline of its investigation into the proposed merger by at least 14 days and up to a maximum of 90 days, but the (AAG) had expressed confidence that approval could be given and the transaction closed by July 31. However, Jonathan Todd, a spokesperson for the (EC) on competition issues, told reporters in Brussels that (DLH) had presented an offer "worse than what was offered before." He added that it would be "impossible" for the (EC) to render its decision by July 31 unless (DLH) came forward immediately with new "information," adding that a "miracle" would be needed to enable an expeditious antitrust ruling. "It's very difficult to understand why they are adopting this approach if they genuinely want a rapid decision from the (EC)," he said.

A (DLH) source said that (DLH) would not be improving its offer, insisting that it had moved "eight meters toward the (EU) and the (EU) [now has] just to move one meter" in (DLH)'s direction.

(AAG) Executive Board member, Peter Malanik told "Austrian Broadcasting ORF" that the company "is surprised about the news from Brussels" but remains confident that the deal will be completed. He conceded that finalizing the transaction by July 31 may not be possible.

Meanwhile, Austrian Cargo signed a marketing agreement with Shenzhen-based, Jade Cargo International (JDC), in which Lufthansa Cargo (LUB) holds 25%. (JDC) will operate twice-weekly, Incheon - Shanghai - Vienna - Frankfurt - Incheon 747-400ERF flights. Jade Executive VP Sales & Marketing, Reto Hunziker said (JDC) wants "to develop Vienna into a 'sub-hub' in our network" and plans to "connect other points in China" with (VIE) this year.

Later, the Austrian Airlines Group (AAG) said it agreed with all works councils to reduce personnel expenses by -5% from 2010 to 2015, saving the company -€150 million/-$209.6 million. "The details of the package are rapidly being negotiated by the social partners. It will not include any extra job cuts beyond the -1,000 posts already announced," the (AAG) said.

Austrian (AUL) named Director Sales Strategy & Development, Christine Debbah to head its forthcoming Global Sales & Distribution unit, which will be part of the company's new Commercial Passenger division scheduled to launch September 1.

August 2009: Austrian Airlines (AUL) flew 1.71 billion (RPK)s traffic in July, a -11.6% decrease year-over-year. Capacity was down -11.7% to 2.14 billion (ASK)s, leaving load factor level at 79.8% LF.

The Austrian Airlines Group (AAG) returned to the red in the second quarter, reporting a -€78.5 million/-$112.3 million loss compared to an +€11.7 million profit in the year-ago period, but expects to benefit from approximately €80 million in annual synergies as a Lufthansa (DLH) subsidiary, (AAG) Executive Board members Andreas Bierwirth and Peter Malanik said.

The pair confirmed that the (AAG) expects the acquisition to be concluded successfully this month, or in September at the latest, and that the news had a positive impact both within the company and on passenger bookings. That will be a welcome boost following months of concern about the future of the tie-up, which Bierwirth said contributed to a sag in market confidence. "Our image has suffered," he said. "But now we have the chance to take a positive direction and continue further."

Second-quarter operating revenue fell -24.6% year-over-year to €514.6 million and expenses were down -9.2% to €599.2 million. Its operating result reversed to a -€84.6 million loss from a +€22.9 million profit last year, when Austrian (AUL) benefited from the country's co-hosting of the quadrennial European soccer championship. The (AAG) also took a €74.3 million charge during the 2009 second quarter related to non-cash impairment of airplanes.

Traffic fell -15.8% to 4.2 billion (RPK)s against a -12.9% drop in capacity to 5.77 billion (ASK)s. Load factor sank -2.5 points to 72.8% LF and unit revenue was down -14.8% to 11.5 euro cents.

Austrian (AUL) has implemented cost-cutting projects designed to save up to -€300 million, "and if it is necessary we will adjust our cost-cutting measures further," Bierwirth said. Malanik added that (AUL) will look to improve operating costs by phasing out 50-seat airplanes operated by its Tyrolean Airlines subsidiary for 737NGs operated by Lauda Air (LAL) on routes to airports such as Rome Fiumicino and Barcelona. Its CRJs will leave the fleet by next summer, leaving 14 DHC-8s. It intends to cut some 1,000 positions by the middle of next year "on the basis of mutually agreed solutions, outplacements and by not filling vacancies," it said.

Regarding the recent -35% drop in business class (C) passengers, Bierwirth said that "on long and medium-haul segments, there is a future for business class (C). On flights up to 90 minutes, it is getting difficult and we have to find a solution." He said (AUL) ideally would like to maintain its business class (C) service on shorter flights.

The company also is evaluating divesting its 22% stake in Ukraine International Airlines (UKR). Malanik said the share helped the (AAG) generate a market presence in Ukraine, but that airline is struggling amid the market downturn. "We will decide in several weeks . . . whether to keep it or sell it. This depends on the market situation."

The (AAG)'s six-month loss of -€166.6 million compared to a -€48.7 million loss in the year-ago semester. Operating loss widened to -€161.6 million from -€29.9 million on a -21% fall in operating revenue to €969.3 million.

The European Commission (EC) confirmed that it will approve Lufthansa (DLH)'s takeover of the Austrian Airlines Group. It did not offer details on its agreement with (DLH) on concessions to alleviate antitrust concerns.

(DLH) said it reached "material agreement" with (EU) regulators on its proposed takeover of the Austrian Airlines Group, but airline officials declined to reveal details as they announced (DLH)'s -88.4% year-over-year second-quarter profit drop to +€40 million/+$56.5 million.

Speaking on a conference call discussing the results, CFO, Stephan Gemkow said the company had reached an accord with the European Commission (EC) on concessions that would allow the (EC) to grant antitrust clearance for (DLH)'s purchase of the (AAG), according to "Bloomberg News."

At a separate news conference, (EC) VP Transport, Antonio Tajani said he is "optimistic" the (DLH)-(AAG) deal will be approved. He added that the (EU) would allow state financial aid to facilitate the takeover. (DLH)'s offer is subject to (EC) approval of both the takeover and the granting of €500 million in restructuring aid by the Austrian government. The purchase is part of (DLH)'s strategy to become a "system of independent airlines" with multiple European power bases, a long-term ambition it maintains despite current financial difficulty. (DLH) reported a first-half operating loss of -€198 million, reversed from a +€564 million profit last year, as revenue declined -15.2% to €10.23 billion.

The Austrian Airlines Group (AAG) said it is "highly probable" that its deal with (DLH) will be successfully concluded this month, or next month at the "latest, following the (EC)'s July 31 confirmation that it will approve the takeover. It also said there are "clear signals that a positive decision is forthcoming in the financial aid proceeding," which (DLH) has said is a condition of its acquisition. "We welcome the positive signals we have received from Brussels and are counting on formal approval soon of the merger with Austrian Airlines (AUL)," (DLH) Chairman & (CEO), Wolfgang Mayrhuber said.

Later, The European Commission (EC) officially approved Lufthansa (DLH)'s proposed acquisition of the Austrian Airlines Group (AAG), saying (DLH) alleviated antitrust concerns by agreeing to reduce service between five European cities and Vienna. The (AAG) announced draconian cuts to its management structure.

The (EC), which previously signaled its intention to grant approval, cleared both the proposed merger and €500 million/$713 million in restructuring assistance for the (AAG) from the Austrian government. (DLH) had said it would not go through with the takeover absent the state aid.

Competition Commissioner, Neelie Kroes said, "This case shows that consolidation in the airline sector is possible with proper remedies to safeguard consumers' interests." The (EC) said (DLH)'s antitrust "remedies package" includes a commitment to relinquish slots, "according to an efficient and timely slot allocation mechanism," that will increase competition, "namely [on] the routes from Vienna to Frankfurt, Munich, Stuttgart, Cologne, and Brussels."

(DLH) launched a public offer for the (AAG) on March 2 after reaching agreement with state holding company (OIAG) to buy its 41.56% stake for €366,000 plus a per share "earn-out option" for all (AAG) shareholders willing to sell. Its €4.49-per-share offer was conditioned on antitrust clearance and approval of €500 million in restructuring aid from (OIAG) to the (AAG). It also was subject to acquiring at least 75% of (AAG)'s permanent voting shares.

(DLH) said that "all of the necessary conditions for the merger in accordance with the public takeover offer have been met within the prescribed deadline and Austrian Airlines (AUL) will be integrated into the Lufthansa Group as of September 2009."

It added that (AAG) shareholders who have offered their shares for sale will receive €4.49 per share "probably on September 3." It said it will be paying the free-float shareholders €166 million in total. The (AAG) said in a statement that its "economic basis . . . improves enormously as a member of the Lufthansa Group."

(DLH) plans to operate the (AAG) as an independent subsidiary as part of its strategy of becoming a "system of independent airlines" with multiple European power bases.

For the second quarter, (DLH)'s passenger airline group reported (EBITDA) of €382 million, down -31.3% from €556 million in the year-ago period, as revenue decreased -20% to €3.86 billion. Traffic declined -5.4% to 38.08 billion (RPK)s on a -1.6% dip in capacity to 49.94 billion (ASK)s, producing a load factor of 76.2% LF, down -3.2 points.

(DLH) blamed "economy-related weaker demand and the altered travel behavior of the passengers," noting that business (C) passengers "have increasingly been buying tickets in the cheaper booking classes, leading to a significant slide in average yields." Chairman & CEO, Wolfgang Mayrhuber said, "The figures speak for themselves. Crises ruthlessly reveal the weak points and we shall act." To that end, (DLH) reaffirmed the initiation of a program to achieve €1 billion in cost savings through the end of 2011. The initiative, dubbed "Climb 2011" and focused on the passenger airline segment, will "be elaborated and implemented during the upcoming weeks," Gemkow said. He added that (DLH) anticipates "a significant decline in revenue for the full year" but that it "continued to target an operating profit" for 2009.

The Austrian Airlines Group (AAG), which is being acquired by Lufthansa (DLH), announced that it will reduce its management staff by approximately -45% from 347 currently, including cutting the number of VPs from 24 to 14. Together with 14 senior directors "who manage the staff functions and a number of selected specialist divisions," they will make up the top management of the group. "By taking this step, we are creating more efficient structures and simplifying our decision-making processes," Executive Board Members Andreas Bierwirth and Peter Malanik said in a statement. The dramatic downsizing is part of the carrier's restructuring program that includes elimination of around -1,000 positions, reducing the workforce to approximately 6,500 full-time positions by mid-2010. (AUL) said it already has "restructured its Sales, Network Planning, Ground Operations, & Controlling Divisions."

September 2009: The Austrian Airlines Group (AAG) will end the short-time work program for approximately 2,500 ground staff at the end of September as planned, although short-time work for cabin staff will continue until year end. The (AAG) will hold talks this fall with employees regarding new labor deals as it seeks to cut labor costs by -€150 million/-$214.5 million. The (AAG) and Lufthansa (DLH) are expected to discuss additional details of their merger at a news conference in Vienna.

The Austrian Airline Group (AAG)'s acquisition by (DLH) became official at a ceremony in Vienna as (DLH) took control of more than >90% of (AAG)'s shares and insisted that the struggling carrier must become profitable as soon as possible.

"Austrian Airlines (AUL) has a cost problem, which we can help with in some ways with our own system," (DLH) Chairman & (CEO), Wolfgang Mayrhuber said. For example, (DLH) will handle all sales activities in Western Europe, while (AUL) will concentrate on sales in southeastern Europe. "The (AAG) has to become cash neutral immediately and cash positive by next year," he said. (AUL) was -€166.6 million/-$237 million in the red through the first half of 2009. "We are keeping to our strategy to become Europe's leading airline group, otherwise we wouldn't have done it," Mayrhuber said of the merger. "But I didn't expect that it would take so long," to get (EU) clearance.

(AUL) COO, Peter Malanik admitted the subsidiary has a tough road ahead and that it is willing to extend cost-cutting measures if necessary. Plans for next year are underway and further details will be announced in 4 to 6 weeks, he revealed.

But (DLH) is not immune to the global recession either, Mayrhuber said. "We aren't growing anymore," he said, warning that "only profitable jobs are secure" as (DLH) considers possible reductions.
He said the airline likely has seen the bottom of the demand decline but, "We don't see sustainable improvement and don't expect that our yields will grow [in the near future]. We have to create our business plan according to that scenario." Asked if (DLH) is interested in taking over any more European carriers, such as the SAS Group or (LOT) Polish Airlines, he confirmed that appeals from troubled airlines across the continent continue, "but we don't have the management capacity, and it is also a cash issue."

(DLH) Chief Officer Group Airlines & Corporate Human Resources, Stefan Lauer said he expects (AUL) to be profitable eventually. "The (AAG) will have to integrate into our system, which includes bmi (BMA), Swiss (CSR), and SN Brussels (DAT)/(EBA)," he said. The first step is to "stabilize the carrier" and stop the "bleeding," he said. Losses at (DAT)/(EBA) and bmi (BMA) must be handled as well. (DLH) will use its merger with Swiss International Air Lines (CSR) as a blueprint for its integration with (AUL).

Later, the Austrian Airlines Group (AAG) said it is increasing the number of potential layoffs as a result of its acquisition by Lufthansa (DLH). (CCO), Andreas Bierwirth told the "Austrian Press Agency" that "the total workforce could be reduced to 6,000" by the middle of next year, as opposed to the originally planned 6,500. "In several areas, it is necessary to reduce the workforce more than planned." As many as 300 of those jobs could come from Austrian (AUL)'s Vienna maintenance operation. "The (AAG) has to operate profitably when ticket prices are down," Bierwirth said.

Andreas Bierwirth said (AUL)'s long-haul network is showing signs of recovery and that two 767-300ERs operating under soon-to-expire leases may be replaced by two 777-200ERs.

(DLH) paid €166 million to (AAG) shareholders for just under 37 million shares. It said it "will prepare to carry out all necessary steps to squeeze out the rest of the minority shareholders" and that those who have not accepted its offer at the current price may do so until September 9.

October 2009: Austrian Airlines Group (AAG) (CEO), Peter Malanik predicted that (AAG) will encounter "several difficult situations" over the next two years as it endeavors to return to profitability, but said it must push forward with reforms. Speaking in Vienna to unveil (AAG)'s "Next Generation 2010" plan, he said the airline group, newly acquired by Lufthansa (DLH), now has its "biggest and last chance to grow." Chief Executive Board member, Andreas Bierwirth said, "First we have to build a new culture within the company. We need motivation for the new start, but we have to strongly tighten our belt."

(AAG) is aiming to reduce unit costs while increasing revenue per seat-mile. It plans to achieve this by expanding capacity while phasing out all of its 50-seat CRJs and most of its Dash 8-Q300s. Some of the Dash 8-Q300s will be retained for regional and domestic services. Seven 737-800s, currently used for charter flights will be switched to scheduled services. "We can reduce seat-mile costs by 40% using 737-800s instead of CRJs," Bierwirth said. (AAG) also plans to add seats on its A320s by 2011.

(AAG) will use bigger airplanes on routes to major markets in Western and Eastern Europe, driving a +10% (ASK) capacity expansion. It said it also will keep investing in "pioneering" Eastern European markets, "meaning Vienna will be more of a continental hub in the future," Bierwirth said. He added that (AAG) aims to remain a network carrier, not a Low Cost Carrier (LCC).

(AAG) plans to reduce its workforce to 6,000 by the end of next year from more than >8,500 currently.

Lufthansa (DLH) Systems signed a three-year deal with Austrian Airlines (AUL) to provide its NetLine Fleet Assigner solution.

(DLH) intends to pay €0.50/$0.75 per share to buy out remaining Austrian Airlines (AUL) shareholders. The Austrian board and shareholders, likely to meet in mid-December, must approve the deal. "The minority shareholders of Austrian Airlines (AUL) will receive cash compensation for their shares in conformity with the law after notification of the squeeze-out has been entered in the commercial register. That will probably occur in the first half of 2010," (AUL) said. (DLH) currently holds 95.4% of (AUL).

November 2009: Austrian Airlines (AUL) flew 1.52 billion (RPK)s traffic last month, a -8.5% reduction year-over-year, against an -11.8% decline in capacity to 1.94 billion (ASK)s. Load factor rose +2.8 points to 78.2% LF.

(AUL), which became fully consolidated into the (DLH) Group on September 3, remains in survival mode. (AUL) posted a -€75.7 million third-quarter loss and said its restructuring will include a greater focus "on expanding service to volume markets with high passenger traffic . . . by offering high-quality service at attractive prices." The result compared to a -€16.4 million loss in the 2008 third quarter and was driven by a -20% year-over-year fall in revenue to €557.7 million. (AUL)'s operating loss widened to -€63.8 million from -€12.1 million. (AUL) said the aforementioned strategy will require it "to significantly reduce our unit costs . . . by deploying larger airplanes, making adjustments to our route network and increasing the number of seats in our airplanes." (AUL) intends to reduce its workforce from 7,500 employees to 6,000 by the end of 2010, saving -€150 million.

(AUL) said synergies with (DLH) will include the merging of foreign sales offices and certain ground operations, as well as combined purchasing power. Nine-month loss of -€242.3 million deepened from a -€65.1 million deficit in the first nine months of 2008.

Elton D'Souza, was named VP Network Management. He previously worked for Swiss International Airlines (CSR).

December 2009: The Austrian Airlines Group (AAG) will rethink its network as it restructures and will focus on high-volume routes rather than connectivity between Western and Eastern Europe, CEO, Peter Malanik said. As recently as two months ago, the (AAG) remained interested in turning Vienna (VIE) into "more of a continental hub," but now Malanik said, "Starting with the 2010 to 2011 winter schedule, we will offer less connectivity and more volume throughout our network." Transfer traffic between East and West will shrink in favor of more capacity and more frequencies on trunk routes to Western European cities, he said. The (AAG) will make a decision on reduction of its transfer business by next summer. "It should not be too much," he said.

Austrian Airlines (AUL) now believes that (VIE) is a weak long-haul hub. While Star Alliance (SAL) partners, United Airlines (UAL) and Air Canada (ACN) each have launched service to Brussels since Brussels Airlines (DAT)/(EBA) was announced as a member, no one has added flights to the Austrian capital. Malanik said he was "disappointed" by the lack of support, but admitted that the "catchment area around (VIE) is too small." As a result, (AUL) will operate a minimal long-haul network. The current winter schedule features six 767-300ERs and three 777-200ERs, with a fourth 777 rotated in after maintenance.

(AUL)'s evolving commitment to Eastern Europe also will include the eventual sale of its 22.5% share in Ukraine International Airlines (UKR). "(UKR) has been an excellent met opener," Malanik said, but its likely privatization will give the (AAG) the opportunity to find a buyer for its shares.

The (AAG) was -€242.3 million/-$354.1 million in the red through the first nine months of 2009.

Russia's Ministry of Transport could banish Austrian Airlines (AUL) from its airspace on January 31 owing to a dispute over (AUL)'s nationality, with Russian authorities arguing that based on current bilateral agreements with Austria, (AUL) no longer is considered a domestic airline following its acquisition by Lufthansa (DLH) in September.

"This is no surprise. But this is not only about Austria. This also affects Switzerland and the UK," (IATA) Director General & (CEO), Giovanni Bisignani said, referring to (DLH) subsidiaries Swiss International Air Lines (CSR) and bmi (BMA). He said he believes a solution could be ready "within the first six months of 2010, but the Russians will want something in return," such as more slots at (EU) airports. "It is now time for negotiations to create new bilateral traffic rights between the (EU) and Russia," Bisignani declared. Russian airlines have raised their safety standards, "so it is logical that they would want more access to international markets," he said.

A Star Alliance (SAL) source said that Russian officials are unhappy with the increasing presence of (DLH) and its subsidiaries in the Russian market. Austrian operates 48 weekly flights to/from six Russian destinations as well as flights over Russian airspace to Beijing and Tokyo Narita.

In general, Russian overflight charges remain expensive for airlines. Although routes vary extensively, based on a limited analysis by (IATA), it appears that on average, an airline flying between North Asia and Europe pays around $3,500 per flight in overflight fees.

January 2010: Austrian Airlines (AUL) flew 1.19 billion (RPK)s traffic in December, a -2% fall year-over-year, against a -6.2% cut in capacity to 1.64 billion (ASK)s. Load factor rose +3.1 points to 72.5% LF.

(AUL) remains burdened by a long-haul product that has lost money every year since its 1989 launch and faces a critical 2010, during which it must make significant progress on its restructuring, (CCO) and executive board member Andreas Bierwirth said. "2010 will be a year of destiny for our company," he said. (AUL)'s long-haul network includes Tokyo Narita, Beijing, Male, Delhi, Bangkok, New York (JFK), Washington Dulles, Toronto, and Punta Cana. But Vienna (VIE) has not proven to be a hub that can sustain traffic even to that limited collection of destinations, and Bierwirth admitted that offering excellent on board service will not be enough to entice passengers to fly through (VIE). "We have to find reasons" that customers should choose (AUL), he said. "It is also not optimum for us to operate two types of long-haul airplanes, six 767-300ERs and four 777-200ERs."

(AUL) still believes it is possible to create a profitable long-haul product that is aligned with its European and Middle Eastern network. "Our long-haul operation still has a place in the company," (COO) & Executive Board Member, Peter Malanik said. An important improvement will be to adjust departure times so that passengers within the Lufthansa Group can choose from among several flights. "Currently, all member carriers leave Beijing during lunch or in the afternoon. When (AUL) offers flights in the evening, we will be more attractive," Bierwirth said.

Ticket sales through (DLH)'s global network also should improve (AUL)'s long-haul loads. If progress is made by the autumn, it will decide whether to replace two 767s with two 777s.

Malanik and Bierwirth said the restructuring is progressing as planned. "The volume of passengers in terms of pre-bookings for the summer season is improving," Malanik revealed. (AUL) expects double-digit passenger growth on its continental network this year and plans to continue replacing regional jets with 737NGs on European routes. "However, yields remain low. Our business (C) travelers are not returning to business class (C)," Bierwirth warned. Still, (AUL) is targeting positive operational cash flow across it European network this summer.

Lufthansa (DLH) said it plans to launch flights to Baghdad and Erbil from both Frankfurt and Munich during the summer schedule. (DLH) said demand for Iraq service is "growing" and traffic rights and "further infrastructure improvements" are required. Subsidiary, Austrian Airlines (AUL) currently serves Erbil from Vienna.

Fokker Services announced a €130 million/$186.5 million, 10-year "FLYFokker Take Care" service agreement with Austrian Airlines (AUL) covering nine F 70s and 15 F 100s.

February 2010: Austrian Airlines (AUL) is asking provincial governments for financial support to help prop up its loss-making domestic network. It operates up to 23 weekday flights between Vienna (VIE) and Graz, Linz (LNZ), Klagenfurt, Innsbruck (INN) and Salzburg. Although the flights provide valuable feed, (AUL) said it no longer can absorb the losses. It also is evaluating the possibility of offering the services under Public Service Obligation (PSO) agreements. "There are currently 255 (PSO) air routes established in Europe, so this would be nothing unusual," (COO) and executive board member, Peter Malanik said. The (CEO) of an Austrian airport said that (AUL) is losing nearly €7 million/$9.8 million per year on its (VIE) - (INN) service and around €2 million on the (VIE) - (LNZ) route.

Lufthansa (DLH) said that all remaining shares in the Austrian Airlines Group (AAG) held by minority shareholders have been transferred to (DLH) subsidiary, Osterreichische Luftverkehrs Holding by order of the Vienna Commercial Court. Share certificates are redeemable for cash compensation, (DLH) said. In December, (DLH) said it would pay €0.50/$0.70 for each outstanding share. The (AAG) is expected to be de-listed from the Vienna Stock Exchange soon.

The Russian Ministry of Transport extended traffic rights for Austrian Airlines (AUL) until March 31, after which it may banish (AUL) from its airspace owing to a dispute over the carrier's nationality. Russian authorities argue that based on current bilateral agreements with Austria, (AUL) no longer is considered a domestic airline following its acquisition by Lufthansa (DLH). (AUL) operates 48 weekly flights to/from six Russian destinations as well as flights through Russian airspace to Beijing and Tokyo Narita.

Transaero Airlines (TRX), which operates 14 weekly code share flights with Austrian Airlines (AUL) on the Moscow Domodedovo (DME) - Vienna route, is concerned about the Russian Ministry of Transport's decision to question (AUL)'s nationality. The government is arguing that, based on current bilateral agreements between Russia and Austria, (AUL) is no longer considered a domestic airline following its acquisition by Lufthansa (DLH). It currently flies to Russia on temporary traffic rights. "We hope that this situation would soon come to a successful and reasonable end," a Transaero (TRX) spokesperson said, noting that (AUL) "is one of the oldest carriers flying to Russia" and that other European airlines that have been acquired by carriers in other countries "don't seem to face the same troubles." (TRX) code shares with bmi (BMA) on the (DME) - London Heathrow route.

It dismissed the prospect that it could take over Austrian (AUL)'s flights in the event (AUL) loses traffic rights. "At this current moment, we don't even consider this possibility. We still hope this story will have a happy end," the spokesperson said. (AUL) operates 48 weekly flights to/from six Russian destinations, including a thrice-daily, (VIE) - (DME) service. Lufthansa (DLH) stressed that the dispute is a matter between the Austrian and Russian governments and that "all subsidiaries are managed independently," according to Director Corporate Communications Europe, Aage Dunhaupt. He confirmed that (AUL) conforms to the "now common procedure in the (EU), and like Air France (AFA)/(KLM), extra-(EU) traffic rights of each of the carriers we acquired are safeguarded in a national foundation. We did this with Swiss (CSR), with bmi (BMA), with Austrian (AUL)." Such a setup is not currently required for Brussels Airlines (DAT)/(EBA), in which (DLH) controls only 45%.

Austrian Airlines (AUL) is moving forward with the delayed restructuring of its maintenance operation and plans to cut -210 positions - - a quarter of its Vienna (VIE) Maintenance Repair & Overhaul (MRO) workforce - - a spokesperson told the "Austrian Press Agency." (AUL) no longer will serve third-party customers, with that work being transferred to Lufthansa Technik (DLH) (LTK) or other affiliated providers. The layoffs are part of Austrian (AUL)'s effort to reduce the number of employees to 6,000 by year end. It is unclear if it will continue to operate its maintenance bases in Innsbruck, where it works on Dash 8s, and Bratislava, where it handles F 70s and F 100s. The (VIE) layoffs are scheduled to begin March 1.

Lufthansa Cargo (LUB) and Austrian Airlines (AUL) Cargo announced increased cooperation that will eliminate about 25% of the latter's 200 employees. Beginning July 1, the companies said they will "optimize" traffic through their Frankfurt, Munich, and Vienna Hubs, merge global distribution services and "harmonize" product portfolios and production processes. (LUB) and (AUL) will integrate handling and distribution in Austria while freight activities in all other countries will be combined under (LUB). "Vienna Schwechat will become a central European hub for (LUB), comparable to our German hubs at Frankfurt and Munich. Thanks to Austrian (AUL)'s excellent route network, (LUB) customers will also be able to take advantage of direct flights to destinations in all corners of the globe," (LUB) Chairman & (CEO), Carsten Spohr said. (AUL) (CCO), Andreas Bierwirth called the move "a further step in the reorganization of Austrian Airlines (AUL)."

(AUL) has announced that it plans to sell its 22.5% stake in Ukraine International Airlines (UKR).

It has announced new seasonal routes:
Graz - Antalya: weekly seasonal 737-800 service operating until March 5;
Graz - Kos: weekly seasonal A321 service starting on May 26;
Innsbruck - Dublin: 2x-weekly seasonal 737-800 service operating until March 20;
Innsbruck - Kefallinia: weekly seasonal F 100 service starting on June 5 (operated by Tyrolean Airways;
Innsbruck - Preveza: weekly seasonal F 100 service starting on June 6 (operated by Tyrolean Airways)
Linz - Antalya: weekly seasonal 737-800 service starting on February 12;
Linz - Kerkyra - Graz - Linz: weekly seasonal 737-800 service starting on June 1;
Vienna - Bologna Marconi - Florence: daily F 70 service starting on February 28 (replacing non-stop service to Florence);
(AUL) will give up its Vienna - Ekaterinburg and Vienna - Odessa routes on March 26 but will continue to code share on the daily Ukraine International (UKR) service between Vienna and Odessa. It has already terminated its Vienna - Riyadh - Jeddah service on December 20. (AUL) has suggested to the government that its domestic routes from Vienna to Graz, Klagenfurt and Linz should become public service obligation routes as it would not be able to continue to profitably operate these routes.

March 2010: Lufthansa (DLH)'s full-year result, which included an €8 million/$11 million operating loss by the Passenger Airline Group, was buoyed slightly by the +€93 million operating profit posted by its Swiss International Air Lines (CSR) subsidiary, the most successful carrier in the (DLH) stable.

(CSR)'s performance contrasted with the -€293.9 million operating loss at Austrian Airlines (AUL), a -€78 million deficit at bmi (BMA) and a +€24 million profit reported by Germanwings (RFG). The Lufthansa (DLH) mainline and affiliated regionals lost -€107 million. Brussels Airlines (DAT)/(EBA), 45% owned by Lufthansa (DLH), was not included in the company's full-year financials released last week.

(CSR)'s profit was down -68% from the year-ago surplus of +€291 million on a -14.3% decline in revenue to €2.77 billion. Passenger numbers rose +2.4% to 13.8 million, and load factor dipped -0.2 point to 80.1% LF. The airline said it "intends to improve earnings again in 2010. This is not solely to be achieved by further cost savings but also by higher revenue."

Austrian (AUL), which was merged into (DLH) in September, had a €31 million impact on the group's operating result. On its own, the negative (EBIT) was narrowed 5.8% from a -€312.1 million operating loss in 2008. Revenue dropped -20.3% to €1.96 billion and net loss reached -€324.9 million, improved from a -€429.5 million deficit in 2008. Passenger numbers were off 10.2% to 9.9 million, on a -11.2% cut in seat capacity. Load factor slipped -0.9 point to 74% LF. (AUL) intends to have positive cash flow this year and is targeting an operating profit in 2011.

Bmi (BMA)'s €78 million impact on (DLH)'s bottom line reflects its contribution since joining the group in July. Through the six months ended September 30, 2009, (BMA) reported an operating loss of -£111 million/-$168.7 million. (DLH) said (BMA)'s mainline fleet will be cut to 30 airplanes from 39, while bmibaby (BMI)'s will fall to 14 from 17. It said it "anticipates a further operating loss in 2010."

Finally, Germanwings's (RFG) operating profit of +€23.9 million marked a +300% improvement from the 2008 result. Revenue declined -7.6% to €580 million as (RFG) cut five A310s from its fleet. Passenger numbers decreased -6% to 7.2 million. It now operates 26 A319s.

Austrian Airlines (AUL) will begin replacing regional jets and small turboprops with larger airplanes on its European routes in order to bolster its competitiveness with higher volume and more attractive fares. The move, expected to generate an additional +1 million passengers over the next 12 months, is a key part of the "rebirth of (AUL)," CCO, Andreas Bierwirth said in Vienna, and an important step in its restructuring since its acquisition by Lufthansa (DLH) last year. "(AUL) is waking up from its beauty sleep. For too long, it was built on a standard from the '90s," he said.

(AUL) lost -€324.9 million last year, and a change in culture is required, Bierwirth admitted. "One big mistake in the last three years has been focusing too much on business (C) travelers during a time when Low Cost Carrier (LCC)s started to increase their presence at our hub," he said, which cost (AUL) market share. The growth at Vienna bypassed the flag carrier. "(LCC)s began to cannibalize the network carriers, and we have become a niche player."

(AUL) now is charged with offering a network product with lower fares, which are as low as €59 one way. Frequencies on many routes will increase and many night stops outside Austria will be eliminated. The last of the 10 CRJ-200s operated by its Tyrolean Airways subsidiary will leave the fleet in mid-April and will be dismantled and sold for parts. "On 50 routes, we will save -25% in seat-mile costs by using bigger airplanes," Bierwirth said. (COO), Peter Malanik said adjustments for the 2010 to 2011 winter schedule will feature a larger number of connections between Eastern and Western Europe.

In addition to (LCC)s, (AUL) is competing against an increasing number of Star Alliance (SAL) partners. A source close to (SAL) said that bringing Turkish Airlines (THY) into the alliance, for example, could have hurt older members because it is growing so rapidly. Malanik disagreed, saying, "It is better for (THY) to be in the alliance than outside as a competitor," although he conceded that (AUL) has found it "tough" to keep up.

May 2010: Austrian Airlines (AUL) will relaunch Vienna - Mumbai service October 31 using a 767-300ER. (AUL) also will add a sixth weekly Delhi service and a second Vienna - Male flight during the next winter season. "We benefit on our long-haul routes from the fact that Lufthansa (DLH) is doing our sales worldwide," Member of the Chief Executive Board, Peter Malanik said. (AUL) operates six 767-300ERs and four 777-200ERs. With the relaunch of Mumbai, it again is operating all 10 of its long-haul airplanes. It will take delivery of four new Dash 8-Q400NGs this year with the first arriving this month, bringing to 14 the number in its fleet. The airplanes are operated by its subsidiary Austrian Arrows. The Dash 8-Q400NGs are replacing smaller Dash 8-Q300s. (AUL) and Austrian Arrows will have around 83 airplanes operational this year.

June 2010: The Austrian Airlines Group flew 1.54 billion (RPK)s traffic in May, a +10.3% increase from the year-ago month. Capacity was up +3.9% to 2.06 billion (ASK)s, while load factor rose +4.3 points to 74.8% LF.

July 2010: Austrian Airlines (AUL) flew 1.63 billion (RPK)s traffic in June, up +11.9% year-over-year. Capacity rose +2.9% to 2.06 billion (ASK)s as load factor increased +6.3 points to 78.7% LF.

(AUL) had been temporarily forced to divert its daily, Vienna - Dnepropetrovsk service to Zaphorozhye in May and June because of a dispute with the local airport authorities who had closed the airport for “runway repairs” exactly during the operating times of the daily, Austrian (AUL) flight. After talks between Austrian (AUL) and Ukrainian authorities, the flights were reinstated on July 1.

Lufthansa (DLH) subsidiary, Austrian Airlines (AUL) is on track to become profitable on an operating level this year. (DLH) Chairman & (CEO), Wolfgang Mayrhuber said, "I expect that (AUL) will reach this target. (AUL) has a plan." He conceded, however, that in some areas of its restructuring, "we want to see…more dynamic" action. For example, (AUL)'s talks with its unions to win concessions that would lead to cost savings of -€150 million/-$185.4 million annually are taking longer than (DLH) would have liked.

Austrian Member of the Chief Executive Board, Peter Malanik said (AUL) is well aware that it needs to keep expenses tight. Despite the cost-cutting, it is gaining market share at its Vienna hub against tough competition from Low Cost Carrier (LCC)s, he noted.

(AUL) has deployed larger airplanes on European routes and is offering lower fares than in the past. "This of course brings lower yields," Malanik said. "But before [we focus on] better yield, we have to increase our load factors to gain market share."

Meanwhile, (AUL) is working on implementing a new network system for the coming winter schedule that will be centered on time banks to offer more connections, with a particular focus on traffic arriving at Vienna (VIE) from Western Europe to connect to flights to destinations in Eastern Europe.

(AUL) also is installing new, lighter seats on its narrow body airplanes, allowing it to add one extra row on each. It received clearance from (DLH) to add two new A320s to its fleet, allowing it to phase out its last Dash 8-Q300s by next year.

August 2010: Austrian Airlines (AUL) flew 1.85 billion (RPK)s traffic in July, up +7.4% from the year ago month. Capacity was up +2.8% to 2.23 billion (ASK)s, while load factor rose +3.6 points to 82.7% LF.

(AUL) is planning to cut approximately -1000 positions this year leaving it with 6000 staff by the end of the year.

(AUL) plans to resume four-times-weekly, Vienna - Baghdad service aboard an A320 on October 31, pending a flight safety analysis. Also on October 31, Vienna - Mumbai: 5x-weekly, 767-300ER service.

(AUL) has signed a code share agreement with Air Malta (MLT) covering the Malta - Vienna route operated 5x-weekly by Air Malta (MLT) and several connections for (MLT) passengers via Vienna. (AUL) has also started code sharing with new sister carrier, Brussels Airlines (DAT)/(EBA) on the Vienna - Brussels route, where both carriers offer a total of 7x-daily services now. It is again expanding its network from the upcoming winter season and will also add two new A320-200s in 2011.

Boeing (TBC) announced that Austrian Airlines (AUL) will use the (TBC) Library and Authoring modules of its Maintenance Performance Toolbox on board its 777-200ERs, 767-300ERs and 737NGs.

September 2010: Lufthansa (DLH) delayed its new four-times-weekly, Munich – Baghdad service that was supposed to start September 30 until further notice, citing weak demand. Subsidiary, Austrian Airlines (AUL) also postponed its Vienna – Baghdad service until further notice.

Lufthansa Cargo (LUB) has entered into a joint venture (JV) with sister carrier, Austrian Airlines (AUL) that will manage sales in Austria and the management of the Austrian cargo capacity. (LUB) owns 76% of the new company with Austrian (AUL) controlling the remaining 24%. (LUB) had already announced that it would cut -450 staff positions itself and it is expected that another -50 jobs at Austrian (AUL) cargo will be cut as a result of the plan. (LUB) will take over cargo sales in all other markets. It is planning to operate 18 MD-11F freighters again by the end of the year when its last remaining two airplanes are scheduled to be reactivated.

October 2010: The Austrian government announced it will create a so-called "ecological air travel levy" similar to the tax introduced in Germany last month. Passengers boarding flights in Austria will be charged €8 for European flights and €40 for long-haul flights. The tax is expected to raise €60 million in 2011, rising to €90 million in successive years. Further information, including when and how the tax will be levied was not supplied.

Airlines in Austria have already criticized the new tax and said they will pass it on to their passengers. Citing the negative experience in the Netherlands, where the government was forced to rescind a green tax after passengers started avoiding the country's airports, an Austrian Airlines (AUL) spokesperson said it is “not realistic” that the government can raise €60 million.

The Austrian government revealed more details on its so-called "ecological air travel levy," which will begin March 30, 2011 for all departing flights. Passengers boarding flights in Austria will be charged 8€ for European flights, €20 for medium-haul flights and €35 for long-haul flights. Austrian Airlines (AUL) Executive Board member, Peter Malanik said that the new tax could cost (AUL) a "high double-digit million of Euros" and could affect its restructuring process.

Wataniya Airways (WYA) reached code share and interline agreements with Austrian Airlines (AUL) under which (WYA) customers gain access to 19 new European connecting destinations via Vienna and which will allow (AUL) guests to travel to Kuwait on board (WYA). Beginning October 31, (WYA) will launch a Beirut – Vienna code share flight with (AUL).

November 2010: Lufthansa (DLH) subsidiary, Austrian Airlines (AUL) said it expects to turn a profit on its long-haul flights for business (C) travel in 2011 for the first time since they were established in 1988, owing to the relaunch of 5x-weekly Vienna – Mumbai flights on October 31. (AUL) now serves nine overseas destinations: Bangkok, Beijing, Delhi, Male, Mumbai, New York (JFK), Tokyo, Toronto, and Washington Dulles.

Executive Board member, Andreas Bierwirth said that the Vienna – Mumbai service is (AUL)’s tenth long-haul destination. (AUL) is integrated in the Lufthansa (DLH) global sales system and expects a stronger performance on its intercontinental network. Also, thanks to the optimization of (AUL)’s maintenance operation, the additional route does not require extra airplanes. (AUL) currently operates a long-haul fleet of four 777-200ERs and six 767-300ERs.

However, Bierwirth noted that owing to difficulties such as a lack of state-of-the-art business class (C) cabin, terminal quality problems at its Vienna (VIE) hub, and global competition, (AUL) faces challenges to make its way back to profitability. “Without making positive results, there is no further expansion of the long-haul network possible,” he added, noting that by 2013 (AUL) hopes to install new generation business (C)- and economy (Y)-class seats for its long-haul fleet.

(DLH)’s outgoing Chairman & (CEO), Wolfgang Mayrhuber said recently that (AUL) will get new airplanes when it makes money again.

In planning its future long-haul fleet, Bierwirth said a “harmonized” fleet will be “focused on either the 787 or [Airbus] A350XWB,” and possibly the 767 or 777 if further airplanes are needed.

December 2010: The Supervisory Board of Austrian Airlines (AUL) named Thierry Antinori as its new (CEO). The 49-year old will start his new job on April 1, 2011. Antinori has so far been a member of the Executive Board at Lufthansa (DLH)’s passenger airline division,
where he was responsible for Sales & Marketing. At (AUL), the Executive Board will be increased from two members to three. Andreas Bierwirth and Peter Malanik, the current members, will continue at Austrian (AUL), albeit with slightly different responsibilities. Bierwirth is understood to be taking over Operations and the Network, while Malanik will be in charge of Finance, Human Resources (HR)
and Maintenance Repair & Overhaul (MRO). Austrian (AUL) Chairman, Stefan Lauer stated that the airline is now entering its second restructuring phase, in which it would have to pursue growth opportunities in addition to keeping costs under control.

Lufthansa (DLH) bought Austrian (AUL) in mid-2009. Having posted a third-quarter profit, (AUL) is expected to deliver its first full-year profit in 2011 since the ownership change.

Georgian Airways (GEI) signed a code share agreement with Austrian Airlines (AUL) on its three weekly, Tiflis – Vienna services.

February 2011: (TAT) Technologies’ wholly owned subsidiary, Piedmont Aviation Component Services, signed a five-year Auxiliary Power Unit (APU) maintenance agreement with Austrian Airlines (AUL) covering (AUL)'s 767 fleet.

March 2011: Despite a successful year in which it rebounded from a -€34 million 2009 loss to earn a +€1.1 billion/+$1.53 billion) net profit in 2010, Lufthansa Group Chairman & (CEO), Christoph Franz conceded that the performance of (DLH) Group subsidiary airlines was "mixed."

Swiss International Air Lines (CSR) posted 2010 operating income of +€298 million, more than triple a +€93 million operating profit in 2009, on a +24% rise in revenue to €3.46 billion. "The success of (CSR) is due largely to effective cost management, but also to strong demand and the upswing in intercontinental and freight business, as well as strong sales in the domestic Swiss market," (DLH) stated.

Austrian Airlines (AUL), however, incurred a -€66 million operating loss in 2010, narrowed from a -€230.9 million deficit in 2009, while British Midland (BMA) posted an operating loss of -€145 million in its first full year as a (DLH) group carrier. Franz said, "(AUL) and (BMA) are still working flat out at their restructuring."

(AUL) said its improved result is owing to a new market strategy in Europe, restructuring efforts and synergies in the (DLH) Group. (AUL) carried 10.9 million passengers last year, up +9.7% over 2009. Load factor rose +2.2 points to 76.8% LF. "We are moving in the right direction," (AUL) Executive Board Member & (CCO), Andreas Bierwirth said. "However, the restructuring of (AUL) is far from being completed. We have a great deal of work still left to do."
(AUL) has cut -1,000 jobs over the last year to reduce its number of employees to 6,000. "The productivity of every employee increased by +23% in terms of turnover," (COO), Peter Malanik claimed.

Bierwirth said (AUL) needs to "sell more business class (C) tickets" and acknowledged its A320s and 737s have not yet reached (DLH) Group productivity standards. Asked if (AUL)'s new cost base can be compared to lower cost carriers (LCC)s such as Air Berlin (BER), he said, "We are starting to close the gap."

Meanwhile, Germanwings (RFG)'s 2010 operating loss of -€39 million was reversed from an operating profit of +€23.9 million in 2009. (RFG)'s full-year revenue lifted +8.6% compared to 2009 to €630 million.

The Lufthansa Group announced that Board Member and Executive VP Marketing & Sales, Thierry Antinori will resign and “shall not be assuming the position as Chairman & (CEO) of Austrian Airlines (AUL)” as planned. Antinori, 49, was to take up his post at (AUL) from April 1. He joined (DLH) in August 1997 as an Area Manager for Western and Southern Europe.

April 2011: (SAS) Scandinavian Airlines, along with Star (SAL) Alliance partners Lufthansa (DLH), Swiss (CSR) and Austrian Airlines (AUL), said it has again won the Swedish government's procurement of air travel, in a contract carried out by Swedish Armed Forces Logistics (FMLOG). The agreement is worth a total of SEK700 million/$111.6 million.

Austrian Airlines (AUL) will launch 3x-weekly, Vienna (VIE) - Baghdad service from June 8 using an A320, marking (AUL)'s return to the Iraqi capital after a 21-year absence. (AUL) previously operated to Baghdad from 1982 - 1990. It currently operates flights from (VIE) to the Iraqi city of Erbil; it will operate 6x-weekly service on the route during its summer schedule.

(AUL) will become the second Star (SAL) Alliance carrier to operate to Baghdad; Turkish Airlines (THY) in October 2008 re-launched 3x-weekly Istanbul Ataturk - Baghdad service that had been suspended since the 1991 Gulf War. Lufthansa (DLH) had also planned to launch service to Baghdad, but confirmed that it has scrapped the idea for now. "We planned [a Frankfurt - Baghdad] route earlier, but the demand for it was very weak," a spokesperson explained. "We'll keep studying it."

May 2011: Austrian Airlines (AUL) and its subsidiaries, Tyrolean Airways and Lauda Air (LAL), received (IATA) Operational Safety Audit (IOSA) certification renewals.

Austrian Airlines (AUL) Executive Board Member & (CCO), Andreas Bierwirth said that (AUL) plans to reduce capacity -40% to destinations in Northern Africa/Middle East on its summer schedule.

The move comes following (AUL)'s reporting of a first-quarter operating loss of -€63.5million/-$93.7 million, which (AUL) blamed in part on the disaster in Japan and the political unrest in the Middle East. “This crisis hits (AUL) directly,” said Bierwirth, who pointed out that “20% of (AUL)’s capacity goes to Japan and the Near East.”

In an adjusted summer schedule, Bierwirth said (AUL) will cut 14 weekly flights to North Africa/Middle East destinations. For example, Vienna - Damascus service will be reduced to 4 or 5x-weekly from 2x-daily services. Tripoli service will be reopened when commercial flights to/from Libya are allowed again, he said.

“We are focused strongly on two areas: Eastern Europe, which still has not reached pre-crisis levels, and the Near East,” explained Bierwirth. Despite the crises, (AUL) said it is still targeting a full-year positive operating result.

July 2011: Austrian Airlines (AUL) completed the retrofit of its A320 family airplane fleet, adding lighter seats and a new cabin interior.

August 2011: The Austrian Airlines Group reported a 2011 first-half operating loss of -€63.1million/-$89.8 million, slightly improved from a -€68.7million operating deficit in the year-ago period. Revenue was down -0.7% to €1.02 billion.

"We had to deal with a lot of unexpected events," (AUL) Executive Board Member, Andreas Bierwirth said. Middle East unrest, the Japan earthquake, high fuel prices, currency exchange rate fluctuations and new taxes added +€100 million in costs to (AUL)'s ledger. The Lufthansa Group subsidiary said 20% of its capacity is tied to destinations hit by crisis during the 2011 first half. (AUL) has reduced capacity to North Africa and Middle East destinations by 40%.

The fact that (AUL) was able to achieve first-half 2011 (EBITDA) of €39.3million (compared to €7.7 million in the same period a year ago) is owing to a restructuring program started 18 month ago, executives said. "We reduced labor costs by -€100 million, the fleet from 96 to 80 airplanes," said Executive Board Member, Peter Malanik, adding that he doesn't rule out further cost-cutting measures. "Cutting costs is an ongoing process," he commented. "We are still targeting a full-year positive operating result, and if not this year, then in 2012."

(AUL) transported 5.1 million passengers in the first six months of the year, up +1.9% compared to the 2010 first half. Average load factor was 70.8% LF.

(AUL) (OS) will fall short of its target for a full-year positive operating result, (AUL) supervisory board Chairman, Stefan Lauer said.

(AUL) has been hit hard by the loss of business to the Middle East and North Africa.

Lauer confirmed that in the third quarter, (AUL) will announce a new CEO, who will begin by year end. Executive board members, Peter Malanik and Andreas Bierwirth will remain in charge.

Bierwirth said he will not rule out additional cost-cutting measures for the winter season, which could result in a temporary fleet reduction. “We are very flexible to adjust capacity upward and downward,” Bierwirth said, adding that European airlines are concerned about another economic downturn.

September 2011: Star Alliance (SAL) (CEO), Jaan Albrecht was appointed by Lufthansa (DLH) Group's executive board to become Chairman & (CEO), Austrian Airlines (AUL). Albrecht, who has helmed the Star (SAL) Alliance for a decade, will start his tenure at (AUL) by November. (AUL) reported a 2011 first-half operating loss of -€63.1 million/-$89.8 million.

(DLH) Group (CEO), Christoph Franz said that Albrecht's "experience, his network and excellent industry know-how, equip him ideally to master the huge challenges facing Austrian Airlines (AUL)."

Air New Zealand (ANZ) (CEO), Rob Fyfe, Chairman of the Star (SAL) Alliance's Chief Executive board, said, "It is with regret that we are losing such a capable and high performing (CEO)." The Star (SAL) Alliance said it will launch a (CEO) search process. (DLH) and (AUL) are Star (SAL) Alliance members.

October 2011: After the first six months, the Lufthansa Group returned to a profit, posting an operating profit of +Euro 300 million, an increase of Euro 174 million over last year. This was despite the natural disasters in Japan and political unrest in North Africa. Wholly owned Swiss International (CSR) posted similar figures. The events in Japan and North Africa had a particularly adverse effect on the Group's other carriers, Austrian (AUS) and British Midland International (BMA), both of which recorded losses. However, Lufthansa Cargo enjoyed another productive period with an operating profit of +$133 million.

December 2011: Austrian Airlines (AUL) may have to extend its cost-cutting program as the economic outlook weakens demand. (AUL) will save up to €100 million/$134 million this year but this may not be enough.

Lufthansa (DLH) (CEO), Christoph Franz told (AUL) employees in Vienna that (DLH) will no longer subsidize (AUL). Details were not given, but an extended cost-saving program will include all areas of the company, including possible layoffs, the Austrian daily "Die Presse" reported.

Since (DLH) took over OS two years ago, (AUL) employee numbers have been reduced from 8,500 to 6,000.

January 2012: All five Lufthansa (DLH) Group airlines carried a total of 106.3 million passengers in 2011, a growth of+ 7.5% compared to the previous year. The group’s capacity (ASK)s grew by +9.8% overall in 2011, while traffic (RPK)s rose +7%. Average passenger load factor fell by -2.2% to 77.2% LF.

Passenger boardings were 65.5 million, up +11.1% compared to the previous year. Capacity rose by +11.8% in the full year, while sales were up +8.8%. Load factor was 77.2% LF, down -2.2% year-over-year.

Swiss International Air Lines (CSR) carried approximately 16.4 million passengers, up +8% compared to the year before, but load factor dropped slightly by -1.1% to 81.1% LF.

Loss-making Austrian Airlines (AUL) transported 11.3 million passengers, up +3.4% compared to 2010, but load factor fell -3% to 73.8% LF, mainly because it is operating larger airplanes.

British Midland International (BMA), which has been sold to British Airways (BAB) parent (IAG), transported 5.7 million passengers, -7.4% less compared to 2010. Load factor fell -4.6%, to 67.1% LF year-over-year.

Germanwings (RFG) carried 7.5 million passengers, -2.7% less than the year before. Load factor increased slightly by +1%.

Lufthansa Cargo (LUB) recorded a +5% growth in its tonne-kilometers transported in 2011 and carried 1.9 million tonnes of freight and mail. Capacity grew by +8.6% in the full year, while sales were up +6.5%, resulting in a load factor drop by -1.4% to 69.5% LF.

“The trend of decreasing sales that emerged in the autumn continued in the remaining months of the year,” (DLH) said. “Group-wide, it proved not possible to match the level of sales growth recorded at the beginning of the year.” In the light of this development and ongoing economic uncertainty, the Passenger Airline Group plans to achieve a +3% low-level growth in (ASK)s in the full-year 2012. This will be realized by using larger airplanes and introducing the new Europe cabin on (DLH) Passenger Airlines' European routes.

Austrian Airlines (AUL) has announced a €220million/$280 million restructuring program, which includes cutting routes, reducing staff costs and replacing its fleet of 11 737s with up to seven A320s.

New (AUL) (CEO), Jaan Albrecht said that an aggressive change in (AUL)’s cost structure is urgent. (AUL) is targeting a savings of up to €220 million this year “and this should reach up to €260 million in year number three,” Albrecht said.

“Aviation is changing. That means Austrian (AUL) has to change as well,” he said. The former Star (SAL) Alliance head became (CEO) in November. Last month, Lufthansa (DLH) (CEO), Christoph Franz told (AUL) employees that (DLH) would no longer subsidize the financially troubled carrier and it may have to extend its cost-cutting program as the economic outlook weakens demand.

(AUL) has reduced its 2012 growth rate by -11%. Important (AUL) markets (such as Eastern Europe and Middle East) nearly collapsed in 2011, he said, which led to the decision to make several route cuts, which will be announced by February.

Albrecht said that 27% of (AUL)’s earnings go to taxes and fees, and costs could hit €338 million in 2012 because of the European Union (EU)’s Emission Trading Scheme (ETS), which took effect January 1. He wants to start intensive talks with suppliers, such as Vienna Airport, to reduce this burden.

Albrecht said that talks with employees for new collective contracts will begin immediately. He ruled out laying off employees, but warned that (AUL) needs to reduce its cost structure, which is +20% higher than other European carriers.

If its restructuring program is successful, (AUL) plans to add two 777-200ERs in 2013 and two 777s in 2014. (AUL) would not comment on which long-haul destinations would be added, but they would most likely be Shanghai Pudong or Newark, New Jersey.

(AUL)’s long-haul fleet comprises four 777-200ERs. Six 767-300ERs will remain in operation at least until 2018.

(AUL) has given up its routes from Vienna to Damascus, Helsinki, and Milan Linate on November 15. It continues to serve Milan Malpensa four times daily and plans to resume 5x-weekly A319-100 service from Vienna to Tripoli International on March 25. (AUL) has temporarily moved its Vienna - Varna service to Bourgas between October 15 and February 26 as Varna airport is closed for runway repairs.

February 2012: Austrian Airlines (AUL) is increasing services to Eastern Europe from March 25 to focus on its corporate strategy. (AUL) will axe its Vienna (VIE) – Mumbai services, replacing it with 767-300ER flights (VIE) – Tel Aviv and (VIE) – Tehran.

(AUL) will increase Vienna (VIE) – Bucharest Otopeni service from 3x- to 5x-daily, and (VIE) - Sofia from 4x- to 5x-daily with the summer schedule. (AUL) will increase its (VIE) – London Heathrow service from 3x- to 4x-daily. (VIE) – Barcelona service will increase from 2x- to 3x-daily.

(AUL) will add a fifth daily, Klagenfurt – (VIE) flight from March 1. (VIE) – Tripoli service will resume with 5x-weekly flights on March 25. (AUL) will reduce (VIE) – Stockholm Arlanda service from 4x- to 3x-daily.

March 2012: Lufthansa’s (DLH) operating profit dropped by almost -20% to +€820 million/+$1.07 billion in 2011 and (DLH) expects to see profit shrink to a mid-three-digit million-euro figure this year. The group blamed aviation taxes and high fuel prices for the profit decline.

In addition, (DLH) announced a net loss of -€13 million/-$17 million for 2011 due to a larger-than-expected losses and disposal costs at British Midlands International (bmi) (BMA), which it is selling to British Airways (BAB) parent company, the International Airlines Group (IAG).

The (DLH) Group transported 100.6 million passengers last year, up +8% over 2010. “Some (DLH) Group airlines could not match the difficult environment,” (DLH) Chairman & (CEO), Christoph Franz said during a press conference in Frankfurt. Germanwings (RFG) was hit the most, and was particularly affected by Germany’s ecological tax. “Without being a member within the (DLH) Group, Germanwings (RFG) would not [have] survived the new tax,” he said, adding that 5.4% of (RFG)’s turnover is needed to cover the tax.

Franz said the new German and Austrian aviation tax cost the company €361 million and made up 14% of its overall costs. Fuel prices increased +25% to €5.8 billion. The (DLH) Group’s operative margin is down -1.3% to 3.4%.

“The financial profile of our company remains stable but we need better results to secure the future of Lufthansa (DLH),” Franz said, adding that “ticket prices have to become more expensive.”

(DLH)’s latest cost-reduction program, "Climb" has created -€1 billion in savings over three years. (DLH) plans to cut costs by -€1.5 billion by the end of 2014, sell loss-making (BMA) and inject +€140 million of fresh equity into Austrian Airlines (AUL). “But -€1.5 billion must be the minimum,” he said.

Within the next six years, 170 new airplanes, valued at €17 billion, will be delivered to (DLH). (CFO), Stephan Gemkow said these airplanes will have to be financed. “The aviation market [has] changed completely,” Gemkow said.

Looking forward, (DLH) faces high costs in Germany, pressure from low-cost carriers (LCC)s and strong competition from Middle East carriers. “We have to rebuild our company and make tough decisions,” Franz said, adding that all areas will be affected. For the moment, he ruled out layoffs.

Gemkow expects 2012 passenger growth to be in the single-digit percent numbers. “Our growth in terms of capacity will be reduced to +2%, maybe a zero percentage rate,” he said. Fuel costs in 2012 will increase from €1.2 billion to €7.5 billion, even though 74% is hedged.

Austrian Airlines (AUL) Chief Commercial Officer (CCO), Andreas Bierwirth resigned and will be replaced by Karsten Benz, Lufthansa (DLH) Passage VP European Sales & Services, effective April 1. According to an (AUL) management source, Bierwirth resigned because of a lack of support from the (DLH) management and a difference of opinion on the airline’s restructure.

“Karsten Benz is one of the most experienced top managers we have in the Lufthansa Group in the field of sales and network management. With this recommendation, we are sending a clear signal that we will be continuing to work with everything we have on the long-term perspectives of Austrian (AUL),” said Group Airline Chief Officer, Stefan Lauer. The supervisory board steering committee will propose the change at its next meeting.

(AUL) is in the middle of a difficult restructuring process. The work program it first presented in January is a package of measures designed to save the company -€220 million/-$280 million this year. “But if high fuel prices will increase and the Air Berlin (BER) Group continues to expand in Vienna, then these measures will be not enough for (AUL).”

Loss-making Austrian Airlines (AUL) and its flight crew (FC) union have failed to reach an agreement on plans to reduce labor costs as part of its $220 million restructuring program announced in January.

“Despite intense but fair negotiations, it has proved impossible as yet to reach an agreement over the Modernization of Collective Agreements work package,” (AUL) (CEO), Jaan Albrecht said during a press conference in Vienna. “The measures discussed would not have been sufficient themselves to stop the automatic increase in costs from 7% a year irrespective of the economic trend and success of the company.” Albrecht said he now has to inform the Lufthansa (DLH) board that (AUL) will begin to “transfer Austrian (AUL) into (AUL) subsidiary) Tyrolean to reach a better cost base.” Wages at Tyrolean are about -25% lower than (AUL).

Group Airline Chief Officer, Stefan Lauer said (AUL) will “leave the door open for talks with the union but March 31 will be the last day for talks.” If the two cannot reach an agreement, the integration process into Tyrolean will speed up. Lauer added that an agreement with the pilot (FC) union board will be absolutely necessary to bring Austrian (AUL) back to a sustainable company.

(AUL) said that over the past six weeks, the airline has looked at the value of every single euro in administrative divisions in an effort to cut costs by more than -€100 million/-$130.5 million, and find ways to increase revenue by +€60 million. But it said that will not be enough to take the airline into the black in a way that will last.

April 2012: Lufthansa (DLH) Group subsidiaries Austrian Airlines (AUL) and Germanwings (RFG) have launched code share flights between Austria and Germany. Both carriers operate 5x-daily, Vienna (VIE) - Cologne (CGN) service; 7x-daily, (VIE) - Stuttgart (STR) service; 2x-daily, (VIE) - Hanover service; as well daily services from Klagenfurt and Salzburg to (CGN).

This year, (DLH) has begun to transfer more flights to (RFG) out of (STR) as both carriers optimize their route networks. From summer 2012, (RFG) will serve all European destinations for (DLH) out of (STR). German domestic destinations will still be served by both carriers.

Austrian Airlines (AUL) has concluded the planned transfer of (AUL)’s Flight Operations into its subsidiary, Tyrolean Airways, to take place after July 1, as part of its $220 million restructuring program.

(CEO) Jaan Albrecht said the transfer “releases (AUL) from inherited structural burdens” so (AUL) can be more competitive.

According to a statement, nothing will change for the company’s 600 pilots (FC) and 1,500 flight attendants (CA) because “the savings should be achieved by means of level salary increases.”

The next step is to integrate the (AUL) Flight Operations into Tyrolean without a duplication of efforts by the end of the year.

Intense negotiations with the personnel workers’ council of the ground staff and (GPA) union over the Modernization of Collective Agreements work package lasted “until the very last minute, but unfortunately no agreement has been reached,” (AUL) said.

(AUL) has struck a tentative agreement with pilots (FC) and cabin attendants (CA) that could head off (AUL) plans to shift their contracts to subsidiary Tyrolean with less generous terms, according to an internal joint email from the (AUL) management and union Betriebsrat Bord.

The agreement, which must be ratified, calls for buying out current contracts and replacing them with a new deal at the same pay but without automatic pay raises.

(AUL)’s planned transfer of (AUL)’s Flight Operations into Tyrolean Airlines as part of its €220 million/$289.7 million restructuring program had set the stage for a legal battle with (AUL)’s 600 pilots (FC) and 1,500 cabin attendants (CA). So far, 40 pilots (FC) have left (AUL).

Later, however, (AUL) came to terms with its workers' council and has now given up plans to merge its Flights Operations into subsidiary Tyrolean Airways. The unions represented in its worker's council have agreed to lower wages in return for a single payment of an undisclosed sum to all employees prior to the new labor contracts being put into force later this year.

The company said its fleet renewal program was underway with the “removal of 11 737NGs and the acquisition of seven A320s.”

May 2012: Austrian Airlines (AUL) decided to transfer the company’s mainline operations (which include about 80 airplanes and 2,100 employees) to subsidiary, Tyrolean Airways from July 1 after failing to reach agreement with labor representatives.

The move surprised industry analysts after (AUL) announced earlier it had struck a tentative agreement with pilots (FC) and cabin attendants (CA), heading off (AUL)’s plans to shift their contracts to Innsbruck-based Tyrolean with less generous terms. However, negotiations over the past two weeks “proved impossible to reach agreement over principles” with the company’s works council.

(AUL) said the Executive Board views this as a measure to secure (AUL)’s future, abolish automatic salary increases and introduce a modern collective agreement. The move is part of a -€220 million/-$289.7 million cost-cutting plan.

“What our staff need now is clarity,” (CEO), Jaan Albrecht said. “I remain convinced that this path offers us a perspective for the future. The integration could cost (AUL) around €160 million. Forty-three (AUL) pilots (FC) have already left.

(AUL) and Tyrolean have formed a team to carry out the integration work by the end of 2012.

As a result of the merger, Austrian (AUL) employees will be transferred to the Tyrolean labor contracts that are less favorable.

(AUL) will combine its ground operations and hub management as it continues its $220 million restructuring program announced in January.

(AUL) in April concluded the planned transfer of the company’s Flight Operations into subsidiary Tyrolean Airways and earlier this month said it would transfer the company’s mainline operations (which includes about 80 airplanes and 2,100 employees) to Tyrolean Airways after failing to reach agreement with labor representatives.

Gaudenz Ambühl has been named Managing Director, effective June 1, replacing Christian Fitz, who resigned. Rolf Brand will serve as Director of Flight Operations, effective July 1.

Hub management head, Markus Christl has been named VP Ground Operations & Hub Management, replacing Thomas Suritsch.

Austrian Airlines (AUL) has retired its last 737-6Z9 (30137, OE-LNL) which like its only other 737-6Z9 (30138, OE-LNM) has been ferried to St Athan airport (DGX) for scrapping. Both airplanes are only 12 years old.

June 2012: Austrian Airlines (AUL) Star Alliance (SAL) Terminal at Vienna Airport (VIE) opened on June 5. The new terminal started operations when (AUL) flight 9542 arrived from Hurghada, Egypt, with 62 passengers onboard at 4:33 am.

The new 150,000-sq m terminal is staffed by 690 (AUL) employees. “This is a milestone in Austrian air transport,” (AUL) (CEO), Jaan Albrecht said. “Its minimum transfer time of 25 minutes and its new and modern image have returned Vienna Airport to being a competitive hub in Europe.”

Separately, (VIE)-based (AUL) said it will wet lease up to five 737s from Lufthansa (DLH) in July and August to avoid a pilot (FC) shortage after it lost 118 pilots (FC) and 221 flight attendants (CA) in the restructuring process as it transferred operations to subsidiary Tyrolean Airways.

“Currently we have 45 Tyrolean pilots (FC) who will be trained for the Airbus (EDS) fleet,” (CEO), Jaan Albrecht said. He confirmed (AUL) has phased out two 737-600s and two 737-700s. Seven 737-800s should leave by March 2013. (AUL) will add two A320s in October and November.

(AUL) is working on a strategic joint venture (JV) agreement with All Nippon Airways (ANA) for the (VIE) - Tokyo route.

(AUL) will wet-lease additional Do328-100s from Air Alps ((IATA) Code: A6, based at Innsbruck Kranebitten airport (INN)), sister carrier, Welcome Air ((IATA) Code: 2W, also based at Innsbruck Kranebitten airport (INN)) for some flights from Vienna to Budapest Ferenc Liszt International (BUD), Graz International (GRZ), Klagenfurt Woerthersee International (KLU), Prague Ruzyne (PRG) and Salzburg W A Mozart (SZG) airports from next month. (AUL) already wet-leases an Air A!ps Do328 for flights between Vienna and Linz Blue Danube airport (LNZ). This will mainly be required because a significant number of Austrian (AUL) pilots (FC) have decided not to change to the new labor contract based on Tyrolean Airways operations and will instead leave Austrian Airlines (AUL). (AUL) parent, Lufthansa (DLH) will also operate between Vienna and Rome Fiumicino Leonardo da Vinci International (FCO) on behalf of Austrian (AUL) this summer.

Austrian Airlines (AUL) has confirmed additional details about its plan to temporarily wet-lease airplanes from other operations to cover flight crew (FC) shortages as a result of more than >100 pilots (FC) and 200 flight attendants (CA) not agreeing to move to Tyrolean Airways's labor contract from July 1. (AUL) currently thinks it will need the additional capacity for a period of two months. It will wet-lease both Welcome Air Do328-100s. In addition, parent (DLH) will operate a 737-300 on its behalf operating two daily rotations from Vienna to Dusseldorf International (DUS) and a daily flight to Rome Fiumicino Leonardo da Vinci International (FCO). Swiss European Air Lines (CSR) will operate an ARJ-100 on two daily flights between Zurich Kloten (ZRH) and Vienna and a daily Vienna International (VIE) - Varna International (VAR) rotation. Finally Augsburg Airways will operate an E190 from Vienna to Stockholm Arlanda (ARN) 2x-daily and to Munich Franz Josef Strauss International (MUC) daily.

July 2012: Austrian Airlines (AUS) is now planning to resume five times weekly A320-200 service from Vienna International (VIE) to Tehran Imam Khomeini International airport (IKA) on August 29. (AUL) had been forced to suspend flights in mid-June due to Iranian authorities refusing to provide it with jet fuel as a backlash to sanctions imposed on Iran Air (IRN) in Europe.

The Austrian Airlines (AUL) Group on July 1 transferred all Flight Operations (which includes a fleet of some 80 airplanes and 2,100 employees) to subsidiary Tyrolean Airways.

An (AUL) spokesperson said it was business as usual for (AUL)’s 400 flights on the first day of the integration.

Before the transition, Tyrolean was already operating more than half of (AUL) flights, especially those in Austria and to Central and Eastern Europe. The Austrian (AUL) brand will remain on all airplanes and the flight numbers will bear the (OS) code. The supplementary brand arrows on Tyrolean Airlines airplanes will be removed by the end of the year.

(AUL) retains key responsibilities as station management, the technical department, sales in Austria and abroad, as well as network planning, personnel, finances and marketing. There is no change in ownership. Tyrolean Airways Tiroler Luftfahrt GmbH remains a 100% subsidiary of Austrian Airlines AG (AUL).

(AUL) said 460 pilots (FC) and 1,500 flight attendants (CA) have changed their employer within the Group. (AUL) has a total of 900 pilots (FC) and 2,000 flight attendants (CA), including the Tyro9lean Airways employees. It said 110 pilots (FC) and 214 flight attendants (CA) have left the company.

To avoid capacity problems during peak summer months, (AUL) will temporarily wet lease five airplanes from Lufthansa (DLH), Augsburg Airways, Contact Air and Welcome Air.

The move is part of a -€220 million/-$278.5 million cost-cutting plan.

Lufthansa (DLH) subsidiary, Austrian Airlines (AUL) is making progress with its cost reduction program that is targeting cost reductions of -€223 million/-$271 million this year, but warns there are still challenges ahead.

But (AUL) (CCO), Karsten Benz said (AUL) “sees challenges inside the European business, like increasing costs, which have to be solved in the next six months and for the years to come.”

He added the company is working on issues such as reducing landing fees, rising fuel costs and tackling several topics on the employee side.

The €223 million target “is good for now,” Benz said, “but we are not where we want to be. We have to be flexible.”

(CEO), Jaan Albrecht said the company “must become profitable and should announce positive results next year. It is not only to secure jobs, it is necessary that (AUL) become a sustainable company.”

(AUL) wants to grow on its own power again, he said. “We don’t want to rely on additional capacity from other airports.”

Benz said he expects to see further European airline consolidation. “There will some competitors disappear and this is a chance (for (AUL)), which we will use immediately,” he said.

Albrecht said that restructuring the airline remains urgent. “We [will again become] an airline that can compete against others,” he said, adding, that (AUL) will not reduce its 6,000 work force further. Albrecht also said the transfer of (AUL) Flight Operations into Tyrolean Airways remains one of the biggest challenges for the airline.

All Nippon Airways (ANA) has filed an application with the Japanese Ministry of Land, Infrastructure, Transport & Tourism for antitrust immunity (ATI) to add Swiss International Air Lines (CSR) and Austrian Airlines (AUL), both Lufthansa (DLH) Group carriers, to its Japan - Europe joint venture (JV) with Lufthansa (DLH).

According to (ANA), the expanded bilateral (JV) between the (DLH) Group and (ANA) “will offer customers greater convenience and improved access to intra-Europe routes.”

Subject to (ATI) approval, the four carriers plan to launch joint sales initiatives and pricing products from spring 2013.

(ANA) and (DLH) have been working to deepen their partnership over the last year, offering joint products on selected routes from October 2011 with a full range of cooperation in the bilateral (JV) on April 1.

If approved, the (JV) will enable (ANA) to expand its international network by +22% during 2012 - 2013 and further builds on the (ANA)/United Airlines (UAL) (JV) on transpacific routes launched in April 2011.

(AUL) is investing €80 million in new cabin products for its long-haul fleet (lie-flat seats in business class (C) and a new economy class (Y) product). The re-configuration for four 777-200ERs and six 767-300ERs should be completed by March 2013.

The Austrian Airlines (AUL) Group is set to eliminate the brand Lauda Air (LAL) by 2013, as part of its restructuring process. Currently, only one 737-800 is outfitted in Lauda (LAL) livery. (LAL) was founded 1979 by former Formula-1 Racecar Champion, Niki Lauda and was integrated into (AUL) in 2002.

A J Walter Aviation (AJW) announced it has completed the part-out of two 737-6Z9s00 (30137; & 30138) airplanes purchased from Austrian Airlines (AUL). The airplanes were disassembled by eCube Solutions in Wales.

Austrian Airlines (AUL) has signed a letter of intent (LOI) to lease five of seven planned 168-seat A320s scheduled for delivery through early 2013. Two A320s are in Vienna and will undergo transit checks to begin operations in mid-October. (AUL) operates 22 A320 family airplanes.

(AUL) will phase out its last seven 737-800s by March 2013. Four 737s are already sold and 31 former 737 pilots (FC) are undergoing type-rating for the A320 family fleet.

August 2012: Austrian Airlines (AUL) is considering increasing its leisure operations on the long-haul segment.

“There are many possibilities for (AUL), like the tourism incoming business from overseas,” (AUL) (CCO), Karsten Benz said. “We need more courage in creating new business. The leisure market is one of them,” he said.

One of the important overseas tourism markets for (AUL) is Japan, which it serves with daily flights to Tokyo Narita. (AUL)’s only long-haul leisure destination is the weekly, seasonal Vienna - Male, Maldives flights.

(GE) Capital Aviation Services Limited (GECAS) (GEF) announced it will lease two A320-200 airplanes to a new customer, Tyrolean Airways.
Tyrolean Airways is responsible for operating all Austrian Airlines (AUL) flights. The A320-200 are scheduled for delivery in early 2013 and will expand the existing fleet to around 80 airplanes.

September 2012: The Japanese Ministry of Land, Infrastructure, Transport & Tourism has issued antitrust immunity (ATI) to Swiss International Air Lines (CSR) and Austrian Airlines (AUL), allowing All Nippon Airways (ANA) to add both to its Japan - Europe joint venture with Lufthansa (DLH).

(ANA) President & (CEO), Shinichiro Ito said the development will “offer improved access to European destinations” and help “to support (ANA)’s international expansion.”

The two (DLH) Group carriers will launch joint sales and products beginning in spring 2013. (ANA) filed the application in July.

Austrian Airlines (AUL) took delivery of the first of seven leased A320s on September 10. (AUL) did not identify the leasing company. Two more A320s will be delivered this year. By the summer schedule of 2013, all seven A320s should replace (AUL)’s current fleet of seven 737-800s.

October 2012: Austrian Airlines (AUL) plans to add one 777 to its fleet in 2014 and one in 2015, which will increase long-haul capacity around +25%.

(AUL) (CEO), Jaan Albrecht said (AUL)’s long-haul network delivers 43% of its total capacity (ASK)s, “but we don’t have the right balance right now between short/medium and long-haul network,” Albrecht said, adding, “We have to adjust this.”

(CCO), Karsten Benz said (AUL) has “to invest in our product” before thinking about further growth. He expects positive results through the joint venture (JV) "Atlantic Plus-Plus," which includes United Airlines (UAL), Swiss International Air Lines (CSR), Air Canada (ACN), Lufthansa (DLH) and Brussels Airlines (DAT)/(EBA). “Most likely we [will] have new destinations on the USA East Coast,” although they have not yet been decided, Albrecht said.

In September, (CSR) and (AUL) were granted antitrust immunity (ATI), allowing All Nippon Airways (ANA) to add both carriers to its Japan - Europe (JV) with (DLH) on its Vienna - Tokyo Narita route.

“We have a clear commitment to our long-haul network,” Albrecht said. “That’s why we [have invested] about €90 million/$14.2 million in a new business (C) and economy (Y) class. That means a total of 2,500 new seats for our six 767-300ERs and four 777-200ERs.” With these measures, (AUL) expects growth in the long-haul segment.

The first airplane, a 767-300ER, will undergo a cabin reconfiguration and should return to service in early November. By May 2013, the cabin overhaul in all 10 airplanes should be complete.

(AUL) transports around 1.1 million passengers on 5,500 long-haul flights annually to eight overseas destinations. (AUL)’s 24 Fokker F 70/100s and 14 Bombardier Dash 8-Q400s will undergo a cabin facelift during the 2013 first quarter.

(AUL) is looking to replace its nine Fokker F 70s and 15 Fokker F 100s regional jet fleet by the end of 2016 - 2017.

(AUL) (CEO), Jaan Albrecht said that all of its Fokkers are paid for and the (AUL) is looking for a replacement. “Austrian wants to use the strong buying performance of Lufthansa (DLH). It should be a type (of regional Airplanes) which is also used within the Lufthansa group,” he said, declining to give details on a specific type.

However, (DLH) Head Fleet Management, Nico Buchholz said that if (AUL) came back to profitability and showed signs for sustainable future, it would have easy access to (DLH) Group’s Bombardier C-Series options. Swiss International Air Lines (CSR) will receive the first CSeries jet in 2014.

Austria’s air navigation services provider Austro Control has begun implementing "Free Routes" airspace in the Vienna Flight Information Region (FIR), with the official publication of 37 ‘Night (DCT)s’ (Night Direct Routings). Within "Free Routes" airspace, users can plan routes between a defined entry point and a defined exit point, without reference to the (ATS) route network, but subject to airspace availability. Flights remain at all times subject to air traffic control (ATC).

Austro Control said that the high take-up rate of Night (DCT)s during the first hours of availability on the night of 17 - 18 October confirmed the level of airline demand. It said that “all technical systems at Austro Control and its neighboring (ANSP)s, as well as in the airplanes and at Eurocontrol in Brussels handled this transition smoothly.”

The effects on sectorization and capacity will be evaluated by Austro Control and Eurocontrol until the end of the year, with future implementation steps dependent on the outcome of this evaluation.

Free Route Airspace Wien (FRAW) is being implemented in line with the European Network Improvement Plan and the Functional Airspace Block – Central Europe (FAB CE) Airspace Plan. By creating access to shorter routes, (FRAW) is expected to create a more efficient flow of air traffic, and reduce fuel consumption and CO2 emissions. Free Routes is also a key element of the "Single European Sky" initiative.

November 2012: Austrian Airlines (AUL) will launch 5X-weekly, Vienna - Chicago O-Hare 767-300ER service on May 17 in a joint venture with United Airlines (UAL).

December 2012: Austrian Airlines (AUL) has named Lufthansa (DLH) CityLine Managing Director, Klaus Froese as the new Managing Director of its low-cost carrier (LCC) subsidiary, Tyrolean Airways, effective February 1.

Froese replaces Gaudenz Ambühl, who oversaw the transition earlier this year when the Austrian Airlines Group transferred all Flight Operations to Tyrolean Airways.

The Austrian Airlines Group is cutting -150 administrative positions as part of its €260 million/$337.8 million restructuring program. The measures (which also include eliminating redundancies in the Flight Operations of Tyrolean Airways and technical processes) will result in more than >-€10 million in savings.

Tyrolean Airways Managing Director, Gaudenz Ambühl called the move “highly painful.” However, he said “it is one that our restructuring makes inevitable. This makes it possible for us to realize all of the savings in costs enabled by the operational transition. These measures have been widely expected. They will now eliminate the redundancies found in operations.”

Other cost-saving measures include consolidating the management of Flight Control Operations from two centers to the Vienna hub. Also, Innsbruck will serve as the headquarters of all Flight Administration Operations. Technical Maintenance will continue to be handled at a variety of stations. Innsbruck will handle the Bombardier Dash 8-Q400; Vienna will be responsible for the Fokker, Airbus (EDS) and Boeing (TBC) fleets; and Bratislava will handle overhauling of the Fokker fleet. “Our Fokker maintenance in Bratislava is already a niche market in Europe and will remain,” the company said. The measures will be implemented in 2013.

“The difficult conditions prevailing on markets do not leave us any choice,” (CEO), Jaan Albrecht said. “We have to increase our organization’s efficiency and to eliminate redundancies in the entire Group. This especially applies to duplications in our organizations, of which we have been aware for a number of years.” Albrecht, who became (CEO) about a year ago, said: “I can say Austrian (AUL) is now stabilized. That makes me confident to bring us forward. The time pressure we had at the beginning is gone, and we can implement the next steps.”

But challenges remain. “We have to continue stabilizing to earn revenues. The integration process of Austrian (AUL) and Tyrolean, especially in Flight Operations, is difficult,” Albrecht said.

February 2013: Lufthansa (DLH) and subsidiary, Austrian Airlines (AUL) have announced the suspension of all of their flights to Tripoli International airport (TIP) from February 5 until further notice citing the security situation in the Libyan capital as the reason for the temporary suspension. (DLH) had offered a daily A319-100 service from Frankfurt while (AUL) had been operating to Tripoli five times weekly with Tyrolean Airways Fokker F 100s. No other carriers from Europe, the Middle East and North Africa also serving the country, have so far suspended their flights.

March 2013: Austrian Airlines (AUL) will join the All Nippon Airways (ANA)-Lufthansa (DLH) joint venture (JV) on its daily, Vienna - Tokyo Narita route from April 1. (AUL), which will gain better market-access in Japan, will share revenues with (ANA) on the route.

(AUL) (CCO), Karsten Benz said (AUL) will also launch a (JV) with United Airlines (UAL) on its new Vienna - Chicago O’Hare route from May. “We will get full support from (UAL), which we didn’t have in 2001 and 2008 [on earlier services to Chicago],” he said, adding that load factors on Austrian (AUL)’s North Atlantic routes to Washington Dulles and New York (JFK) have been far above 90% LF.

“Current bookings for our new route to Chicago are promising and above expectations,” he said.

Benz added the airline will “focus now on a successful implementation of both joint ventures, then we [will] look for markets and partners where we can jointly create additional customer value.”

(AUL), which is upgrading its long-haul fleet cabins, is facing delays on the upgrade of its 10 767-777s. According to Benz, two 777-200s and one 767-300ER offer the new cabin products. “We have informed our clients that we will reduce a few frequencies during the summer in order to continue our product upgrade,” he said, adding, “Our target to reconfigure all airplanes during the winter season was too ambitious.”

Benz said he sees good progress on (AUL)’s load factor. “We continued with a tight capacity management during the winter. In January, demand for air traffic within Europe has been lowered again. Our business becomes more and more seasonal,” he said.

(AUL), a (DLH) subsidiary, is undergoing a complete restructuring process. Benz said (AUL) has now stabilized, “but still a ways from being healthy. We will continue to add new products and services to generate more passengers and improving our results. On the other hand, rest assured that we will continue to do our homework in strict cost management,” Benz added.

(AUL) is working on new collective working agreements for cockpit (FC)/cabin crew (CA) and ground staff (MT) personnel; it hopes to implement the new contracts this year.

The Austrian Airlines Group has announced plans to cut a quarter of its Innsbruck-based Tyrolean Airways workforce as it consolidates its administrative functions in Vienna. Last July, (AUL) transferred all Flight Operations to its wholly owned regional subsidiary, Tyrolean Airways as part of a -€220 million/-$278.5 million cost-cutting plan.
“We have to concentrate our scarce administrative resources at our Vienna hub if we are to become even more effective,” Tyrolean Airways Managing Director, Klaus Froese said, detailing plans to cut around -100 of the -400 remaining Tyrolean jobs in Innsbruck.

Functions such as Crew & Traffic Management will be shifted to Vienna, but Tyrolean’s Aircraft Maintenance and Call Center will remain at Innsbruck. The Innsbruck-based staff will be offered the option of relocating to Vienna or they will be compensated if they are unable or unwilling to move. “The decision by the Tyrolean management is both courageous and painful at once. After just a few weeks of intense analysis, Klaus Froese has extended the original concept,” (AUL) (CEO), Jaan Albrecht said, noting that the changes should be finalized within a year.

April 2013: Austrian Airlines (AUL) commenced low-frequency services on the 1,100 km route from its Vienna (VIE) hub to Palermo (PMO) in Sicily. Weekly flights are offered in the market from the Austrian capital to the southern Italian city, and operated on a seasonal basis until October with A319s. This summer, (AUL) will serve 10 destinations in Italy; five with at least daily flights (Bologna, Florence, Milan (MXP), Rome (FCO), and Venice), and five with just one or two flights per week (Cagliari, Catania, Naples, Olbia, and Palermo).

Austrian Airlines (AUL) and Swiss International Air Lines (CSR) have joined Lufthansa (DLH)’s joint venture (JV) with Japanese carrier, All Nippon Airways (ANA).

(DLH) and (ANA) began their cooperation on flights between Japan and Europe in April 2012 and now, as anticipated, (AUL) and (XSR) have also joined, effective April 1. “We will benefit from the strong sales of (ANA) in Japan in future, and (ANA) will do from ours. Becoming part of the joint venture (JV), therefore, is another important building block on the way to a healthy (AUL),” (AUL) (CEO), Jaan Albrecht said.

The Austrian Airlines (AUL) Group has phased out its final Boeing 737-800 as part of its restructuring process to eliminate the brand, Lauda Air (LAL). The Lufthansa (DLH) subsidiary has operated several 737 variants for 28 years. All were ordered by Lauda Air (LAL), which was integrated into Austrian Airlines (AUL) in 2001.

(CEO), Jaan Albrecht said, “Now we have a medium-haul fleet of 29 [Airbus] A320 family airplanes, which will operate a bit more than >10 hours per day. Within several months, (DLH) will also phase out its remaining 737-300/500 fleet.”

Austrian (AUL) is undergoing a strict restructuring program, which includes a fleet reduction. “We expect to save €17 million/$21.8 million annually, thanks to the phase-out [of the 737],” Albrecht said. The two 737-600s, two 737-700s and seven 737-800s have flown a total of 300,000 hours for Austrian (AUL). “We transferred 120 pilots (FC) from the 737 to the A320 fleet,” he said.

The next step will be to replace nine Fokker F 70s and 14 Fokker F 100s within three to four years. The Lufthansa (DLH) Group will decide on a replacement airplane, which includes regional airplane orders. Albrecht said the type decision could include the Bombardier CSeries Regional Jet, which (DLH) subsidiary, Swiss International Air Lines (CSR) ordered in 2011. “It is important to continue our restructuring program to produce sustainable earnings again—not only to replace the regional fleet, but also to be able to add an additional Boeing 777 next year,” he said. The 777 should operate on existing routes from Vienna to replace the 767-300ERs.

“Compared to the 767, the 777 brings +20% to +25% of additional capacity on a route, [which could be used] for new routes [such as] North America or Asia,” he said.

(AUL)’s current long-haul fleet includes four 777-200ERs and six 767-300ERs. The 767s will remain in the fleet for the next seven to eight years. The 767 replacement is planned for 2019/2020, Albrecht said.

Austrian also operates 12 Bombardier Dash 8-Q400s.

May 2013: Austrian Airlines (AUL) increased its offering to Spain from its Vienna (VIE) hub this summer, as it launched flights to Palma de Mallorca (PMI) in the Balearic Islands. (AUL), which already serves Barcelona (15x-weekly flights), Las Palmas and Tenerife South (both single weekly), inaugurated the new service with 2x-weekly flights, but will add a 3x-weekly frequency on May 18. Competition in this popular summer market comes from airberlin (BER) subsidiary NIKI (NKI), which offers 17x-weekly flights on the route. Notably, (AUL) itself is not new to the route, which it last operated in August 2008.

Austrian Airlines (AUL) commenced seasonal flights on the 1,700 km route from Linz (LNZ) in the north center of Austria to Kos (KGS) in Greece on April 13. (AUL), which will launch another seasonal service to Chania later this month, offers weekly (Monday) frequencies to the Greek island of Kos until the end of September using Dash 8-Q400s. From May 22 until September 25, competition will be provided by airberlin (BER) subsidiary, NIKI (NKI), which will offer weekly (Wednesday) services using a much larger 180-seat, A320.

(AUL) is eyeing new long-haul routes as it continues restructuring efforts. (AUL) (CCO), Karsten Benz said, “By autumn we will decide which new destinations [to] add next. We have Boston, San Francisco, New York Newark on the radar, as as well as switching our Tokyo Narita flights to Haneda, if we can get slots there.”

(AUL) resumed services on the 7,600 km route from its Vienna (VIE) base to Chicago O’Hare (ORD), which it previously operated between March 2000 and October 2001, and again between May 2007 and October 2008. Beginning on May 17th, (AUL) offers 5x-weekly frequencies on the route using 767-300ERs, considerably increasing connectivity with its Star (SAL) Alliance partner, United Airlines (UAL). (AUL) already operates daily services to two other USA destinations (New York (JFK), and Washington Dulles.

The Austrian Airlines Group will add a fifth 777-200ER to its fleet from summer 2014. The 777-200ER, which has a €33 million/ $43.2 million market value, will be an eight-year lease. “Compared to the 767, the 777 brings +20% to +25% of additional capacity on a route,” he said. (AUL) is considering the 777 as its "center of competence."

(AUL) has traffic rights to Brazil from former Lauda Air (LAL), which was eliminated as part of Austrian’s restructuring process. “If the traffic rights still exist, then we have definitely an interest operating to South America, especially during the winter season,” Albrecht said.

August 2013: Lufthansa Group subsidiary, Austrian Airlines (AUL), 16 months into its comprehensive €220 million/$286.1 million restructuring program, has reported a second-quarter operating profit of +€21 million/+$27.3 million, up +75% compared to +$15.6 million in the year-ago period.

Airberlin (ber) has suspended bookings for flights to Egypt’s Hurghada, Marsa Alam, and Sharm el Sheikh until September 15, owing to unrest and violence sweeping the country. However, flights to/from Egypt are operating as planned. German’s Foreign Ministry is advising against travel to Egypt due to the “current events and the unpredictability of how the situation may develop.”

German leisure carrier Condor (CDF) and TUIfly (HAP)/(HLX) have also canceled all flights to Hurghada and Sharm el-Sheikh until September 15, but the carriers are bringing back tourists.

The Lufthansa Group subsidiaries, Austrian Airlines (AUL) and Swiss International Air Lines (CSR) said they are continuing operations to Cairo, but passengers can rebook flights free of charge.

Austrian Airlines (AUL) has completed its reconfiguration of six 767-300ERs and four 777-200ER long-haul airplanes. (AUL) installed 2,538 new seats, featuring a new lie-flat business (C) class seat and cabin, as well as new seats and cabin for economy (Y) class passengers, including an advanced onboard entertainment system.

(AUL) said reconfiguration of the cabins has considerably boosted customer satisfaction, which has risen 31% points among passengers on long-haul flights since the launch of the new cabin. (AUL) has invested more than >€90 million/$119.8 million in the new product.

(AUL) plans to expand its long-haul fleet by leasing a former Vietnam Airlines (VIE) 777-200ER from next year and is eyeing an additional long-haul destination, either on the North Atlantic or Asia.

The Austrian Airlines Group has named Sabine Mlnarsky-Bständig as Human Resources VP Manager, effective November 1. She succeeds Michael Ruplitsch, who has taken on a new challenge outside the Lufthansa Group.


September 2013: Lufthansa (DLH) is facing uncertainty over the restructuring of its Austrian Airlines (AUL) subsidiary after a Vienna first instance court ruled that last year’s transition of operations and employment from Austrian to its former regional subsidiary, Tyrolean Airways was illegal. Should that decision hold, (AUL)’s restructuring and future would be in limbo. (CEO), Jaan Albrecht said (AUL) is “surprised” by the court ruling, and will appeal the decision.

The Austrian Airlines Group has appointed Stefan Hafenscher to serve as head of corporate controlling of the Austrian Airlines Group in his position as VP. Hafenscher succeeds Wolfgang Henle, who has been named to serve as the new Managing Director of Austrian Technik in Bratislava.

As Lufthansa (DLH) subsidiary, Austrian Airlines (AUL) (one of the largest remaining Fokker F 70/F 100 operators worldwide) works on replacement solutions for the aging airplanes, German media outlets are reporting the Lufthansa (DLH) board is nearing a decision on a long-haul airplane order.

October 2013: Lufthansa Group subsidiary, Austrian Airlines (AUL) reported a nine-month operating profit (before one-time effects) of +€19.4 million/+$26.23 million, improved by +€10.3 million over the year-ago period.

On September 30th, 2013, Austrian Airlines (AUA) celebrated its 56th anniversary of commencing operations in 1957. It also recently passed its biennial Star (SAL) Alliance audit with what it said were the best results in its history and its parent, Lufthansa (DLH) 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 September 2013 court ruling questions the legality of (AUL)’s 2012 transfer of flight operations to its Tyrolean Airways subsidiary. (AUL) 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 (DLH) announced a major wide body order that did not include airplanes for (AUL).

The two events may not be directly related, but serve as a reminder that the success of (AUL)’s restructuring must surely be a pre-condition for any major additions to its fleet.

Austrian Airlines (AUL) will hire 230 additional flight attendants (CA) in 2014. Spokesperson Peter Thier said that “150 of them will be based in Vienna, 80 in Bangkok, Beijing, and Delhi.” The move could lower the cost base of its flight crew (FC) operations, which is part of a €220 million/$278.5 million cost-cutting plan.

“Austrian (AUL) has 440 employees in 40 countries. Of course, wages will be lower in those countries, but we want to present ourselves as more international.” (AUL) also has flight attendants (CA) from Japan, which are based in Vienna.

(AUL) is expanding services to North America as part of its summer 2014 flight schedule. (AUL) will offer 33x-weekly flights from Vienna to North America. From July 1, it will operate 5x-weekly, 767-300ER Vienna - New York Newark service, in addition to its daily Vienna - New York (JFK) service.

Also from July, Austrian will operate a fifth 777-200 on daily, Vienna - Washington Dulles service, replacing the 767-300ER, which will create an additional capacity of 90 seats.

Effective May 2014, (AUL) will increase Vienna - Chicago O’Hare services from 5X-weekly to daily. (AUL) also operates daily, 767-300ER Vienna - Toronto service. “North America has potential. Our flights are very popular, which is why we are increasing their frequency. In the summer of 2014, we will expand our offering to North America by about +30%,” (CCO), Karsten Benz said, adding that (AUL) is growing its long-haul routes, strengthening flight service to the USA, and expects to carry +130,000 more passengers in 2014.

(AUL) has appointed Barbara Fischler as Managing Director of its Innsbruck-based, Telesales & Service GmbH (ATS). Fischler succeeds Richard Kempf, who has assumed the position of Head Department of Corporate Security.

December 2013: Lufthansa (DLH) subsidiary, Austrian Airlines (AUL) and its administrative and technical staff have reached a new collective wage agreement, effective January 1, 2014. The agreement, which applies to about 2,600 employees, is essential to (AUL)r’s cost reduction plan and includes higher starting salaries, flatter wage curves and success bonuses instead of automatic wage increases. An agreement was also reached on salaries for 2014 and 2015; no salary cuts will be implemented.

“Following this reform, which comprises the most extensive change in employment conditions in the company’s history, we now have a modern, socially balanced collective wage agreement, which safeguards jobs and enables employees to participate in the company’s success,” the negotiating partners said.

“On the basis of approving the reform, the employees will bear a considerable part of the burden in restructuring the company,” (CEO), Jaan Albrecht said. “And now we share the responsibility to show that this contribution is not being made in vain.”

(AUL) Works Council Chairman, Alfred Junghans said, “A collective wage agreement cannot cause jubilation in times of cost savings. In this respect, our main focus was to secure the business location and to limit damage for the employees. Overall, however, it is balanced and fair, and it offers more attractive workplaces especially for apprentices and young employees.”

(AUL) said it is committed to keeping its core functions in Vienna at least until 2018 and will eventually develop a redundancy program for employees. (AUL) will withdraw from the occupational pension scheme. A continuation of payments on an individual basis will be made possible for employees. Both parties agreed to implement a framework plan for positions that become redundant despite the collective wage agreement reform.

Austrian Airlines (AUL) will begin 5x-weekly, Vienna - Newark 767 service July 2, 2014. Also a 777 will replace a 767 on daily, Vienna - Washington DC service from July 1. In May, (AUL) increases Vienna - Chicago service to daily from 5x-weekly.

Austrian Airlines (AUL) has appointed Gerhard Pitsch as the new Chief Pilot, effective January 1, 2014. He succeeds Rolf Brand, who will return to Swiss International Air Lines (CSR) at the end of the year. As the “Postholder Flight Operations,” Pitsch assumes responsibility for the management of Flight Operations of Tyrolean Airways.

January 2014: Austrian Airlines (AUL)'s load factor has improved against a cut in capacity. (AUL)'s decision to reduce its capacity by -2.7% resulted in fewer passengers, but helped (AUL)'s planes to be fuller.

(AUL) carried 11.3 million passengers in 2013, with its load factor up +1.1% to 78.6% LF. This year, (AUL) plans to fly +130,000 more people with a fifth new Boeing 777-200ER and new services to Newark.
"In 2013, we achieved a lot: we increased capacity utilization and thus productivity of the company. This represents a significant step on the path to the recovery of Austrian Airlines (AUL)," said Karsten Benz, Chief Commercial Officer (CCO) of Austrian Airlines (AUL).

(AUL) will relaunch Tehran service March 11 with 5x-weekly A319/A320 service. The service was stopped in January 2013. From March 20, (AUL) will increase London - Vienna service from 3x-daily to 4x- with A320s.

The Austrian Airlines Group announced that Tatjana Lulevic-Heyny has been named VP Sales, succeeding Christina Heckl, effective February 10.

German Operating Aircraft Leasing (GOAL), a joint venture of (KGAL) GmbH & Company purchased two used Airbus A340-300 from Austrian Airlines (AUL) under a lease agreement with Swiss International Air Lines (CSR).

February 2014: Austrian Airlines (AUL) increases summer services: Chicago (ORD) increases from 5x-weekly to daily May 1; Toronto from 6x-weekly to daily; Delhi from 5x-weekly to daily. It will add Newark 5x-weekly service. Male weekly service will be added in July, and Tehran 5x-weekly will be added March 11.

March 2014: Austrian Airlines (AUL) expanded its presence in western Asia with the resumption of flights from its Vienna (VIE) base to Tehran (IKA) on March 11th. The 3,169 km sector to Iran’s capital will be served five times weekly, utilizing a mixed fleet of (AUL)’s 168-seat A320s and 138-seat A319s. This airport pair is already served by Iran Air (IRN) with weekly flights. (AUL) has been operating flights to Tehran since 1984, but removed the service from its schedule in January 2013 for commercial reasons. According to (AUL), these included the strong inflation of the Iranian currency, the rial, and the effects of the economic and political sanctions on the ground in Iran. Now, thanks to the current stability in the country, (AUL) is once again resuming flights.

777-2Q8ER (27607, OE-LPE "Blue Danube"), (ILF) leased, delivered to Tyrolean Airlines.

April 2014: Lufthansa (DLH) and subsidiary, Austrian Airlines (AUL) have stopped flights to Libya indefinitely due to security concerns after a bomb exploded in March at Tripoli International Airport, damaging the main runway. The situation has highlighted the deteriorating security situation in the country.

Alitalia (ALI) and British Airways (BAB) have also suspended flights. According to "Reuters," Alitalia (ALI) will suspend flights until April 15, when it will review the situation.

All carriers continue to monitor events, but are unable to make a final decision regarding restarting flights. Several media outlets have reported that two missiles were fired at the airport on March 21, causing surface damage to the runway. Although this was quickly repaired, a second incident provoked further concern about security at the airport.

Austrian Airlines (AUL) said the crises in the Middle East, Russia and Ukraine are having a negative impact on demand, forcing (AUL) to adjust capacities, according to (CCO), Karsten Benz. (AUL) carried more than >2.2 million passengers in the first quarter, down -2.3% year-over-year.

(AUL) stopped flights to Damascus and Bagdad some time ago; it recently announced the temporary closure of Tripoli services.

For the first three months, capacity saw a slight +0.4% increase; (RPK)s were up 0.7%. As a result, load factor improved +0.2 point to 74.2% LF from the year-ago period.

(AUL), one of the largest remaining Fokker F 70/100 operators, is working on replacement solutions for its aging Fokker fleet.

May 2014: Austrian Airlines (AUL) and its Tyrolean Airways subsidiary presented its employees with a framework plan for a new collective wage agreement, which could lead to the merging the two carriers and eliminating the Tyrolean brand.

The agreement includes new flight duty rules, a new salary scale, a profit-sharing scheme based on net profit, a revised pension fund model as well as a new career model for cabin (CA) and cockpit (FC) staff. It also includes a revised pension fund model and a new career model.

Following failed negotiations in 2012, the entire Flight Operations of Lufthansa (DLH) subsidiary, Austrian Airlines (AUL) were transferred to Tyrolean Airways, encompassing about 1,900 employees and all the airplanes.

(AUL) said the new agreement is a means to increase planning certainty and creating the basis for future decisions. Negotiations should be concluded by May 31. “Our employees wish for an agreement and a clear perspective moving forward. They also desire to return to Austrian Airlines (AUL). We want to make this possible,” (AUL) (CEO), Jaan Albrecht said. After tough restructuring measures over the past few years, “(AUL) is once again operating profitably and wants to take the next steps into the future. We have (DLH)’s support in this,” he said.

Tyrolean Airways Managing Director, Klaus Froese said, “The most difficult task was developing a new career model. Other airlines have failed precisely for this reason,” he said, adding, “The centerpiece of our model is a transparent and fair allocation formula for pilots (FC) of the regional fleet and pilots (FC) of larger types of airplane to be appointed to vacant plane captain (FC) jobs.”

“This year, Austrian Airlines (AUL) will make a forward-looking decision and move ahead with ordering a successor model to its fleet of Fokker airplanes. However, such a significant investment decision cannot be made without a consensus being reached on a collective wage agreement,” Albrecht said.

(AUL) is considering several options for its regional fleet replacement. It operates one of the largest Fokker F 70/F 100 fleets in Europe.



July 2014: Lufthansa (DLH) Group subsidiary, Austrian Airlines (AUL) has posted a second-quarter operating profit of +€10 million/+$13.4 million, down -52% compared with a +€21 million operating profit in the year-ago quarter.

Second-quarter operating revenue stayed flat at €586 million; expenses for the quarter were up +2% to €576 million year-over-year.

In the first-half, (AUL) reported an operating loss of €44 million, widened from an operating loss of -€35 million in the first half of 2013.

Austrian (AUL) said the results can be attributed to political unrest in the region, as well as the need to set aside provisions to cover claims arising from the legal dispute on the potential after-effects of the collective wage agreement for flight (FC) personnel.

(AUL) (CEO ),Jaan Albrecht said, “This negatively impacts our earnings, but above all, our future plans as well, due to the fact that we have had to stop our investment program to expand the long-haul fleet in 2015. The management and Works Council for the flight (FC) and cabin crew (CA) are once again called upon to find a solution to the conflict.”

In addition, he said (AUL) has been negatively affected by the war zones in Ukraine and Russia. “(AUL) has suffered from a decline in operating revenues and passenger volumes in this region,” he said. “A similar situation exists in the Middle East. For the time being, Austrian Airlines (AUL) has canceled flights to Damascus, Tripoli, and now Baghdad. The situation remains tense with respect to flight service to Tel Aviv.”

Albrecht said (AUL) would have made positive results if it wasn’t for the crises in its main markets, “but this is not enough to out-balance the weak winter quarter [Q1],” Albrecht said, adding that catching up has not worked out as hoped.

(CCO), Karsten Benz said “The Russian market is declining as well, but we are keeping our operations going by adjusting capacity. Schedules to Russia have been reduced by -6% to -7%. Capacity to the Ukraine has been reduced by -40%.”

(AUL) said it expects positive full-year operating results despite the allocation of provisions and the ongoing challenging business environment. “We are striving to achieve annual results in 2014 as a whole, which are on par with the previous year’s performance,” Albrecht said.

Austrian Airlines (AUL) expanded its long-haul network with the addition of two new routes from its Vienna (VIE) hub, both of which are operated by its 214-seat 767-300s. On July 2nd, the Austrian flag carrier commenced 5x weekly flights to New York Newark (EWR). Next day, on July 3rd, Austrian (AUL) inaugurated weekly operations (Thursdays) on the 7,260 km sector to Male (MLE). There is no competition on either of the two airport pairs. (AUL) is already operating daily flights to New York (JFK).

Lufthansa (DLH) subsidiary, Austrian Airlines (AUL) is considering launching long-haul leisure routes to avoid overcapacity of its fleet of 11 long-haul airplanes during the winter season.

(AUL) (CCO), Karsten Benz said (AUL) is evaluating routes from Vienna to the Dominican Republic, Cuba, Mauritius or the Seychelles for the winter 2015 - 2016 season. “We would also be very interested in operating scheduled flights to the USA West Coast or to Hong Kong and Shanghai, but those routes need additional capacity,” he said, adding, “but as long as we [can’t reach an agreement] with our unions, we can’t extend capacity.” Benz hopes pilot (FC) negotiations will be completed by the fall.

In early June, tensions between Austrian Airlines (AUL) and its unions erupted to a new high, with the airline pulling its proposed labor deal, Fokker fleet renewal and long-haul expansion in response to a strike threat. At the time, (AUL) said there was “no basis” for further talks and withdrew its collective agreement proposal.

Austrian (AUL) recently launched 5x-weekly Vienna - New York Newark services, which could become daily next year. “Our long-haul network could generate more than >1.2 million passengers in 2014, about 600,000 of them traveling on North Atlantic routes,” he added. For example, one Boeing 767 produces about 100,000 passengers per year.

Austrian (AUL) has 32 weekly flights on North Atlantic routes this summer. It currently operates a long-haul fleet of five 777-200ERs and six 767-300ERs.

Benz also said that replacement of its Fokker F 70/F 100 fleet will become urgent, but no fleet rollover is possible until it reaches an agreement with pilot (FC) unions.

“In addition to the Fokker fleet, (AUL) will also have to phase out some of its oldest Airbus 320s in the near future,” Lufthansa Group xecutive EVP Fleet Management, Nico Buchholz said. (AUL) recently added a fifth Boeing 777.

Lufthansa (DLH) subsidiary, Austrian Airlines (AUL) will lease four Bombardier Dash 8-Q400s, to begin regional flights for Swiss International Air Lines (CSR), which had been operated by Darwin Airline. The four airplanes will be wet leased to Swiss (CSR).

Late last year, Etihad Airways (EHD) agreed to acquire a 33.3% stake in Darwin Airline, a regional carrier based in Lugano, Switzerland, to launch Etihad Regional to connect passengers from secondary European markets onto its main network. “The first two airplanes will start services this year and +2 more Dash 8-Q400s will follow in 2015,” (CCO), Karsten Benz said.

The routes include domestic services such as to Lugano from Zurich or Geneva, as well as regional international services. As Austrian (AUL) is a Star (SAL) Alliance member, all airplanes will be painted in (SAL) Alliance livery.

Austrian (AUL) also operates one Dash 8-Q400 on a wet-lease contract for Brussels Airlines (EBA)/(DAT).

Austrian (AUL) is taking over former Darwin Airline flights on Swiss (CSR) regional routes. Late last year, Etihad Airways (EHD) agreed to acquire a 33.3% stake in Darwin Airline, a regional carrier based in Lugano, Switzerland, to launch Etihad Regional to connect passengers from secondary European markets onto its main network.

The routes include domestic services and regional international services. As Austrian is a Star (SAL) Alliance member, all airplanes will be painted in Star (SAL) Alliance livery.

August 2014: Vienna Airport (Flughafen Wien AG) will sell its entire 25.15% stake in Germany-based Flughafen Friedrichshafen GmbH, transferring equal shares to the city of Friedrichshafen and the Bodensee district. Vienna Airport bought the shares in 2007 for €7.7 million/$10.3 million. The purchase price (adjusted for losses in 2011) now amounts to €2.3 million. Vienna Airport (CEO), Julian Jäger said the airport has planned for a long time to sell the Friedrichshafen Airport shares.

Lufthansa Group subsidiary, Austrian Airlines (AUL) Chief Commercial Officer (CCO) Karsten Benz will resign October 1st to take over the newly created position of Group Infrastructure Officer. In this new function, based in Frankfurt, Karsten will merge the infrastructure divisions of Lufthansa Passage and the Group. Karsten has been (CCO) since April 2012.

Lufthansa Cargo (LUB) Executive Board Member, Dr Andreas Otto will become Chief Commercial Officer (CCO) of Austrian Airlines (AUL) on October 1st, 2014. Andreas will follow (AUL) (CCO), Karsten Benz, who will resign October 1 to take over the newly created position of Group Infrastructure Officer.

October 2014: Austrian Airlines (AUL) adds a frequency to Newark service in April 2015 to total 6x-weekly, with an increase to 7x-weekly Boeing 767 service in June.

Lufthansa (DLH) subsidiary, Austrian Airlines (AUL) and the Works Council for flight (FC) and cabin crew (CA) of its Tyrolean Airways subsidiary have reached a framework agreement for a new Group collective wage agreement for approximately 3,200 flight staff. The framework agreement already applies to the approximately 900 pilots (FC) and 2,300 flight attendants (CA) as of December 1, 2014. A key aspect of the negotiated solution is also the transfer of Flight Operations back to Austrian Airlines (AUL) (from Tyrolean Airways) effective March 1, 2015.

According to (AUL), the agreement regulates future salaries and retirement benefits, working time and career development for the cockpit (FC) and cabin crew (CA). The parties to the negotiations agreed not to disclose any details about the agreement.

(AUL) (CEO), Jaan Albrecht said the agreement “is the best of all the options open to Austrian (AUL). We managed just in time to prevent the possible reorganization of the airline.” He added the company “now has a new starting point for a new, unified Austrian Airlines (AUL) (flown by Austrian (AUL), operated by Austrian (AUL). We can now concentrate on designing the future. This includes the modernization of the fleet.”

Albrecht said recently (AUL) plans to change out its Fokker F 70/100 regional fleet to newer variants, also its older Airbus A320 airplanes have to be replaced in the near future.

(AUL) has taken delivery of the third of four additional Bombardier DHC-8-Q400s in connection with a wet-lease agreement with Swiss (CSR). This delivery takes (AUL)’s fleet to 79 airplanes, including 17 DHC-8-400s.

Austrian (AUL) employs 6,300 staff; its fleet comprises 78 airplanes, which flies to about 130 destinations.

November 2014: Austrian Airlines (AUL) is considering more wet-lease contracts for Lufthansa Group member airlines, (CEO) Jaan Albrecht said.

December 2014: News Item A-1: Austrian Airlines (AUL) will begin weekly, Vienna - Mauritius Boeing 767 service on October 20th, 2015.

News Item A-2: Lufthansa subsidiary, Austrian Airlines (AUL) considers the merger with its subsidiary, Innsbruck-based Tyrolean Airways, a “sign of conciliation and as a starting point for a new Austrian Airlines (AUL),” (CEO), Jaan Albrecht said. He added the new (AUL) “unites the company under a common roof, which houses a regional and intercontinental airline.”

Following the framework agreement reached in October between (AUL) and the Works Council for flight (FC) and cabin crew (CA) of its Tyrolean subsidiary, some 3,200 flight attendants (CA) and pilots (FC) will transfer from Tyrolean to Austrian (AUL) effective April 1, 2015. Accordingly, the entire Flight Operations will be integrated into Austrian Airlines (AUL).

(AUL) will take a different approach concerning the Technik facility in Innsbruck. “Tyrolean Technik is a regional company, but has gained international prominence and recognition in its maintenance, repair and overhauling (MRO) work,” Albrecht said. For example, Tyrolean also services third-party contracts on European Bombardier DHC-8-400 operators. In order to maintain and expand this marketability, the Technik facility in Innsbruck will be transferred into a separate company called Tyrolean Airways Luftfahrzeuge Technik GmbH.

This conversion of Innsbruck-based technical services into an independent subsidiary is planned to take place March 1, 2015. About 120 employees will be working in the technical services area in Innsbruck.

Austrian also has a technical service operation in the Slovakian capital Bratislava, which performs maintenance on its Fokker F 70/F 100 fleet. The future of this maintenance operation will depend on the future regional jet airplanes Austrian (AUL) plans to operate (for example, the Bombardier CSeries), Albrecht said. The decision for the future replacement of its Fokker fleet is expected in early 2015.

News Item A-3: Vienna Airport has completed a 9,500 sq m project to remodel its Pier West and C-gates area, which now offers a continuous, spacious gate area, a high-quality culinary offerings and a brighter, more pleasant overall atmosphere.

The modernized terminal, which opened November 14, now serves more than >17,000 passengers, flying with up to 140 airplanes from 15 airlines, mainly from FlyNiki (NKI) and airberlin (BER), as well as carriers from the Oneworld (ONW) Alliance.

“The modernization of Pier West was one of the most important projects within the context our quality strategy, and the results are what we wanted,” (CEO), Julian Jäger said. “This project will serve as a benchmark for future modernization projects focusing on the terminal infrastructure of the airport hub,” Jäger added.

Separately, Vienna Airport said it will open a new railway station on December 12, which will feature express train services to Western Austria and Germany starting from December 14.

February 2015: News Item A-1: Austrian Airlines (AUL) begins 4x-weekly, Odessa Fokker service on March 30.

News Item A-2: Austrian Airlines (AUL) is aiming to corner a larger share of the "very competitive" Indian market, also (AUL)'s third largest, by offering attractive products to meet the growing challenges posed by its global competitors, a top airline official said.

"The Indian market is very competitive and it is growing so fast now. We have to be competitive. We are in competition with everyone who is flying in the Indian market," Stephan Linhart, International Sales Director of (AUL), said.

In a bid to attract Indian customers, (AUL) is offering Indian cuisine, as well as others products ranging from Bollywood movies on their in-flight entertainment systems to latest Indian news on board flights between Delhi and Vienna. India has become the third largest market for (AUL) in the Asia-Pacific region after China and Japan, he said.

"We are trying to pamper our customers. These are little things but it makes a huge difference," he said.

Noting that a major chunk of Indian air travellers were bound for destinations in North America, he said Vienna could become an important transfer hub for the change-over of flights to destinations in the USA and Canada.

Commenting on the burgeoning Indian aviation market, Linhart said the low cost carriers (LCC) in India have created an additional demand in the market. "It (LCC) makes people start flying, which means increase in demand," he said.

The premier European airline, which operates flights to 130 destinations across the world, is a member of the largest global airline grouping Star Alliance (SAL), of which Air India (AIN)/(IND) has become the latest member. (AUL) joined the Star (SAL) Alliance in March 2000.

(AUL) has been flying to Delhi since October 1997. (AUL) currently operates to 39 destinations in the Central and Eastern Europe. (AUL) Is scheduled to start its services to Mauritius in October 2015 and increase frequency of its flights to New York and Chicago sometime later this year.

(AUL) has been a part of Lufthansa Group since September 2009. (AUL) operates a fleet of 80 airplanes, including 11 long haul planes, and carried 11.2 million passengers worldwide in 2014.

News Item A-3: The Austrian Airlines (AUL) Group has appointed Andrea Pernkopf as VP Product Management & Marketing, effective April 1. She succeeds Brend Hartweger.

News Item A-4: Lufthansa (DLH), which is transforming its Eurowings (EWG) subsidiary into a pan-European platform to operate low-cost flights from several bases outside Germany, will launch its first foreign base in Vienna, Austria.

The move follows close consultation with Austrian Airlines (AUL) and at the carrier’s request. Two 162-seat Airbus A320s will be initially stationed in Vienna and will offer point-to-point connections on European routes. The A320s will fly in the colors of the new Eurowings (EWG) and will be staffed with crews ((FC) - (CA)) from Austrian Airlines (AUL).

This partnership is possible as a result of Austrian Airlines (AUL)’s new collective agreement, reached in December 2014, and offers additional prospects to the 900 pilots (FC) and 2,300 flight attendants (CA). "It is logical to operate Eurowings (EWG) from airports that are located within the Lufthansa Group,” Austrian Airlines (AUL) (CEO), Jaan Albrecht said recently. “Since we have now reached a new collective wage agreement, we can evaluate operating (EWG) with Austrian Airlines (AUL) crews ((FC) - (CA)) from Vienna (VIE).” Albrecht said, “It means that we will be able to further strengthen the base after the restructuring phase. It will complement our existing range perfectly.” He added the agreement also means employees are making an important contribution to the future viability and competitiveness of Austrian Airlines (AUL).

Albrecht estimated the number of airplanes to be based in Vienna could increase to up to four, serving between eight to 10 destinations. It is estimated that every additional airplane creates up to 50 new jobs in Vienna.

Albrecht said operating Eurowings (EWG) airplanes, would be similar to what it is now doing for Swiss International Air Lines (CSR). Austrian (AUL) operates two Bombardier DHC-8-Q400s on a wet-lease contract, which will increase to four airplanes.

Building on the new strategy, Lufthansa(DLH) announced in July, Eurowings (EWG) will return to Airbus A320 operations and focus on direct point-to-point flights within Europe. With the new (EWG) brand, the Lufthansa Group is entering new markets in the price-sensitive leisure travel sector, thereby safeguarding its leading position in its home markets of Germany, Austria, Switzerland, and Belgium.

By the end of 2015, Eurowings (EWG) and Germanwings (RFG) (along with other European airlines) are to be united on a joint platform and should acquire new customers by offering low-cost short- and long-haul services.

The Lufthansa Group has ordered 10 Airbus A320ceos for Eurowings (EWG).

The first A320 took off February 1 in the new Eurowings (EWG) livery for its maiden flight.

News Item A-5: Lufthansa (DLH) subsidiary, Austrian Airlines (AUL), which is in the final stages of replacing its aging Fokker F 70/F 100 fleet, is considering transferring 16 Embraer E195s from Lufthansa CityLine to (AUL).

March 2015: News Item A-1: Tyrolean Airways’ Maintenance arm, Tyrolean Technik was re-established as a separate company, effective March 1, as a result of the reorganization of the Austrian Airlines (AUL) Group. It is currently a fully owned subsidiary of Tyrolean Airways and specializes in the Maintenance of Bombardier DHC-8 airplanes. Approximately 120 Maintenance Technicians (MT) are working at the Innsbruck facility.

The integration of Tyrolean Airways and Austrian Airlines (AUL) will take place April 1, when Tyrolean Technik becomes a fully owned subsidiary of Austrian Airlines (AUL).

Tyrolean Technik is responsible for the Maintenance and repair work performed on 18 Austrian Airlines (AUL)’s Dash 8-Q400 turboprops; it hopes to further expand its third-party operations, which currently stands at 40% of the business. “Tyrolean Technik is a regional company with an international reputation and recognition. We want to further expand upon this,” Managing Director, Bernd Meyer said.
Tyrolean Technik carries out Dash 8 base Maintenance at the Innsbruck site, including "A" and "C" checks, as well as other Maintenance, including replacing landing gear and related components, and engine, propellers and engine components.

Austrian Airlines (AUL), a 100% Lufthansa (DLH) subsidiary, is the only Dash 8-Q400 operator within the Lufthansa Group. In addition, (AUL) wet leases four Dash 8-Q400s to Swiss International Air Lines (CSR), one Dash 8-Q400 to Lufthansa (DLH), and one to Brussels Airlines (DAT)/(EBA).

News Item A-2: Austrian Airlines (AUL) (CEO), Jaan Albrecht has been asked to head up SunExpress (SNS), creating a vacancy at the Austrian carrier, which will formally merge with Tyrolean.

Albrecht will continue as Austrian Airlines (AUL) (CEO), until the end of May, taking up his new role on June 1. He will replace current (SNS) Managing Director, Paul Schwaiger, whose contract has expired, although Schwaiger will stay on until mid-July to support the transition. (AUL) said its supervisory board will make a decision on Albrecht’s successor at a later date.

“The decision to ask Jaan Albrecht to assume a new position within the Lufthansa Group was not easy for us. After all, he led (AUL) out of a crisis and achieved a turnaround. However, his good international contacts and his experience in different positions in the airline sector make him an ideal (CEO) of (SNS),” (AUL) Chairman, Harry Hohmeister said.

The former Star (SAL) Alliance (CEO) has accepted his reassignment to (SNS), the Lufthansa (DLH) and Turkish Airlines (THY) joint venture (JV). “I will say it straight out. It is with a heavy heart that I will be leaving Vienna and Austrian Airlines (AUL) at the end of May. But I am leaving with a good feeling about the situation, because (AUL) is well on track. At the same time, I am also happy to be able to contribute my experience once again to such an important international (JV),” Albrecht said.

Albrecht began his career as a pilot (FC) with Mexicana (CMA), where he progressed into various senior operating and commercial management positions. He served as (CEO) of the Star (SAL) Alliance for 10 years before becoming Chairman & (CEO) of (AUL) in November 2011.

The changes were announced on the eve of (AUL)’s April 1 merger with Tyrolean, which will see 3,000 flight attendants (CA) and pilots (FC) transfer back to (AUL) under the carrier’s new collective labor agreement.

“The entire flight operations will be integrated into (AUL), and the add-on “operated by Tyrolean” will no longer be used as of this date. Moreover, all station employees in the federal provinces and all employees in the Flight Operations administration will also switch over to (AUL)” (AUL) said.

(AUL) also named Klaus Froese as (COO) of its extended executive board. “This extended executive board will now consist of Jaan Albrecht ((CEO) until May 31, 2015), Andreas Otto (CCO), Heinz Lachinger (CFO), and Klaus Froese (COO),” it said.

Froese started his career as a pilot (FC) with (DLT), the predecessor of Lufthansa CityLine. He joined the Lufthansa Group in 1989 and became Managing Director of Lufthansa CityLine in 2006.

News Item A-3: Lufthansa Group subsidiary, Austrian Airlines (AUL) is launching a program in the fall to renew its medium-haul fleet, which it expects to conclude at the end of 2017.

Pending formal approval by its supervisory board on March 29, (AUL) will begin replacing its aging fleet of 21 Fokker F 70/F 100 airplanes with 17 Embraer E195s.

The EMB-195s are currently being deployed by Lufthansa CityLine, which in return will receive Bombardier CRJ900 NextGens from Eurowings (EWG), which is being transformed into a pan-European platform to operate low-cost flights from several bases outside Germany.

The 120-seat Embraer airplanes are slightly larger than the 80- to 100-seat Fokkers. It has not yet been decided whether Austrian Airlines (AUL) will receive additional medium-haul airplanes.

The E195s currently have an average age of four years (built 2009 - 2012), compared to the Fokker fleet’s average age of 21 years. The value of a new E195 jet is about €52 million/$55 million, the larger Embraer airplanes use about -18% less fuel per seat.

Details are currently being worked out on how (AUL) will finance the airplanes. The company said at a press conference that the total investment will be around €800 million.

Austrian (AUL) (CEO) Jaan Albrecht said recently (AUL) also considered the Bombardier C-Series airplanes, but now is no longer considering an order for C-Series airplanes.

April 2015: News Item A-1: Austrian Airlines (AUL) begins 5x-weekly, Vienna - Miami Boeing 777 service on October 16. Vienna - Mahon will begin weekly on June 20 with Bombardier Dash 8-Q400s.

May 2015: News Item A-1: Austrian Airlines (AUL) posted a first-quarter loss of -€53 million, slightly improved from a loss of -€54 million in the year-ago period. (AUL) said that crises in the Middle East, Russia and the Ukraine (some of the company major markets) have had a negative impact on revenue.

News Item A-2: Lufthansa (DLH) subsidiary, Austrian Airlines (AUB) plans to follow a cautious growth path after restructuring as competition grows more intense.

News Item A-3: Lufthansa (DLH) has nominated Kay Kratky as (CEO) of subsidiary Austrian Airlines (AUL) as of August 1. Pending supervisory board approval May 12, he will succeed Jaan Albrecht, who is leaving to become (CEO) of SunExpress (SNS), a joint venture (JV) of Lufthansa (DLH) and Turkish Airlines (THY).

The company said that “after a difficult period, (AUL) is well on track to further expand its position and become competitive. Now the focus is on a resolute modernization of its fleet and strengthening of Vienna as an air travel hub.”

(AUL) supervisory board Chairman, Harry Hohmeister called Kratky “the right candidate to lead (AUL) into the next phase of its development . . . increasing profitability and exploiting growth opportunities.”

Kratky has been a member of the Lufthansa German Airlines (DLH) board since 2011. As (COO), he is responsible for Flight Operations and the Frankfurt hub with about 20,000 employees.

He began his professional career at Lufthansa (DLH) in 1979 by training to be a pilot (FC). He became Training Captain and Fleet Commander on the Boeing 747 and became Head of Operations Control at Lufthansa Cargo (LUB) in 2001 as well an MD-11 Captain.

In 2008, Kratky was appointed as Managing Director of Jade Cargo International (JDC), Shenzhen, China.

June 2015: Austrian Airlines (AUL)’s supervisory board has approved the purchase of 17 Embraer EMB-195s with a list price of close to $900 million. The first 120-seat jet will be delivered in August 2015, modified to (AUL) standards and used for training purposes. Nearly 200 (AUL) pilots (FC) will be retrained to operate the Embraer (EMB) airplanes starting in the fall. The first commercial flight is scheduled for January 2016.

“A decision was made today on one of the largest investment projects in the history of Austrian aviation,” (AUL) (CCO), Andreas Otto said. He added, “900 jobs are directly connected to this investment program.”

The 17 jets will come from Lufthansa CityLine, which in return will receive Bombardier CRJ900 NextGen jets from Eurowings (EWG), which is to become an all-Airbus A320 operator.

The Embraer (EMB) jets have an average age of four years, compared to the average age of about 21 years for Austrian’s Fokker F 70/F 100 fleet. The company said the most important factor for airplanes is ongoing operating costs. The E195s use about -18% less fuel per airplane seat.

It was also learned that Estonian Air (ENA) will wet lease one Embraer E170 to serve primarily on Austrian Airlines (AUL)’s Eastern European route network from June to October, securing the Vienna-based Lufthansa (DLH) subsidiary’s operational performance.

“We decided to stabilize our operation as much as possible by implementing this wet lease. Austrian Airlines (AUL) operates +5% more flights compared to the summer schedule last year,” spokesperson Peter Their said. Another reason for the wet lease is to avoid personal shortage during the pilot-training process from Fokker to Embraer airplanes.

July 2015: News Item A-1: Lufthansa (DLH) subsidiary, Austrian Airlines (AUL) will stop Vienna - Dubai services on September 13 due to overcapacity. (AUL) began serving the route in 1996.

Austrian Airlines (AUL) said: “The overcapacity, built up in recent years, resulted in fierce price competition as up to 800 seats per day were on offer. This ultimately made the Vienna - Dubai route unsustainable for (AUL).”

Emirates Airline (EAD) operates double daily services between Vienna and Dubai with a Boeing 777-300ER.

(AUL) (CCO), Andreas Otto said, “The [767-300ER] capacities, which will become available, will be deployed for attractive, new destinations, such as Miami, Mauritius, and Colombo in Sri Lanka starting in October.”

News Item A-2: Lufthansa (DLH) subsidiary, Austrian Airlines (AUL) was forced to cancel 70 short- and medium-haul flights from last week until Monday due to a pilot (FC) shortage, mainly due to illness during the summer high season. According to (AUL), some flights could not operate because several pilots (FC) declared themselves “unfit to fly.”

In addition, (AUL) is transferring its Fokker F 70/F 100 fleet to Embraer E195s, which has led to a shortage of available crews (FC) due to pilot (FC) re-training.

Austrian (AUL) employs 950 pilots (FC).

“We have wet leased a second Embraer E170 from Estonian Air (ENA), starting from August 1,” (AUL) spokesperson, Peter Thier said. The Star (SAL) Alliance carrier has already wet leased one E170 from Estonian Air (ENA) to stabilize its summer operations.

To help alleviate the pilot (FC) shortage, Austrian (AUL) has called up around 25 pilots (FC) from management to fly. It may also adjust its ambitious summer schedule.

(AUL)’s pilot (FC) union has criticized (AUL) for not having enough pilots (FC) and flight attendants (CA) after (AUL)’s rigorous restructuring process.

Austrian Airlines (AUL) plans to add 17 former Lufthansa CityLine Embraer E195s to its fleet and phase out its aging Fokker F 70/F 100s. The first 120-seat jet will be delivered in August, modified to (AUL) standards and used for training purposes.

Separately, Kay Kratky will become (CEO), Austrian Airlines (AUL) as of August 1. He succeeds Jaan Albrecht who is leaving to become (CEO) of SunExpress (SNS), a joint venture (JV) of Lufthansa (DLH) and Turkish Airlines (THY).

August 2015: Lufthansa (DLH) subsidiary, Austrian Airlines (AUL) is preparing to receive the first of 17 modified Embraer E195s (411, OE-LWD).

The first 120-seat jet will be used on training purposes initially before transitioning to revenue service. The first commercial flight is scheduled for January 2016. A second aircraft is expected to join the fleet in September.

Austrian (AUL) acquired 17 former Lufthansa CityLine Embraer E195s at a list price of nearly $900 million to replace its aging Fokker F 70/F 100 fleet.

Lufthansa CityLine in turn, will receive Bombardier CRJ900 NextGen jets from Eurowings (EWG), which is to become an all-Airbus A320 operator.

The Embraer jets have an average age of four years, compared to the average age of about 21 years with (AUL)’s Fokker F 70/F 100 fleet. The E195s use about -18% less fuel per seat.

Nearly 200 Austrian Airlines (AUL) pilots (FC) will be retrained to operate the Embraer aircraft. The company has wet-leased two Estonian Air (ENA) Embraer E170s for the period of the pilot (FC)-training process.

However, the retraining program is ambitious and (AUL), the Star (SAL) Alliance member was forced to cancel 70 short- and medium-haul flights in late July, in part because of a pilot (FC) shortage.

September 2015: News Item A-1: Austrian Airlines (AUL) commenced operations between Vienna (VIE) and Manchester (MAN) on September 10. The 1,442 km sector will operate with a daily service, and is flown using (AUL)’s F 100s. The city pair will face direct competition from (JT2), which operates a 6x-weekly frequency.

News Item A-2: Star (SAL) Alliance carrier, Austrian Airlines (AUL) is restoring long-haul services to the Chinese city of Shanghai next year, after an absence of nine years. The Lufthansa Group operator will resume the route from Vienna from April 4 (initially flying 5x-times weekly before going daily on May 1.

Austrian (AUL) will use Boeing 777s on the link, it states, giving it a second connection to China after Beijing. (AUL) had previously operated to Shanghai but dropped the service in early 2007, after less than three years, as it cut back its long-haul Airbus fleet.

(AUL) subsequently opted to provide connections to Shanghai through a code share with then-provisional Star (SAL) partner, Air China (BEJ).
But the route has become viable again, according to (AUL) (COO), Andreas Otto, as a result of a “significantly improved” market environment and higher local demand. “Shanghai will complement our offering to the most important cities of Asia very well,” he added.

October 2015: News Item A-1: The Lufthansa Group delivered a nine-month net profit of +€1.75 billion/+$ 1.97 billion, up +262.7% from +€482 million in the year-ago period. Lufthansa attributed the significant improvement to its strong summer business to the group’s passenger airlines, low oil prices, and a €500 million profit from its equity stake sale in JetBlue (JBL) in the first half.

It also identified a cost savings of -€1 billion for 2016 to remain competitive.

Lufthansa Group Chairman & (CEO), Carsten Spohr said the results “confirm we are on the right track, and that our chosen strategy is having its desired effect. But we cannot expect to fly for too long with a tailwind of low oil prices.”

Lufthansa refined its forecast for the full year to an adjusted (EBIT) of +€1.75 to +€1.95 billion. This forecast does not incorporate any strike-related costs that might be incurred between now and year-end.

Revenue rose +7.4% to € 24.3 billion, while investments declined -13.6% to €1.93 billion. Operating income was +€1.55 billion, up +62.2% from +€954 million in the prior-year period. The group’s operating cash flow stood at €3.2 billion after the first nine months, some +€1.1 billion up year-on-year.

Favorable exchange rates, as better capacity utilization, drove the positive results. “We have deliberately refrained from further growth, and currently have 25 fewer aircraft in service than we planned to have at this time back in 2012,” Spohr said.

The group generated traffic revenue of €19.4 billion, up +5% from €18.46 billion. Its nine-month adjusted (EBIT) margin amounts to 7%, some +2.6% points above previous year’s level.

“If we exclude the fuel cost and currency factors, our unit costs saw a further increase in the third quarter. And we cannot be satisfied with this trend,” (CFO), Simone Menne added.

The group saw improvement at Austrian Airlines (AUL), which reported a positive (EBIT) of +€61 million for the period, reversed from a -€4 million loss in the year-ago period. Swiss International Airlines (CSR)’s nine-month earnings rose by +€163 million to +€375 million.

Germanwings (RFG) has not just reached breakeven, but clearly exceeded its target, according to the group. “So we must continue to work hard on the competitiveness of our cost structures. And here we have already identified cost savings of around -€1 billion for 2016,” Carsten Spohr said, adding, “Our aim here is not to have to further adjust our network to our costs, but to give ourselves a competitive cost structure that will enable us to once again open up new routes and tap new markets.”

News Item A-2: Austrian Airlines (AUL) began 5x-weekly, Vienna - Miami Boeing 777 service.

News Item A-3: (AUL) began work on revamping the cabin interiors of 29 Airbus A319, A320 and A321 aircraft. The reconfiguration will cost around €25 million/$28.4 million and be completed in 2017.

“Our new business class is very attractive for our customers in the long-haul segment, but this appeal is missing on the continental fleet. In this case, we will have to spend money in order to significantly improve the product,” (CCO), Andreas Otto said.

He said (AUL) believes a business (C)-class product on European routes still makes sense, although just 2% of its passengers book this class.

Main changes include business (C) class seat pitch increasing by +2 inches/5 cm from 30 inches/76.2 cm to 32 inches/81.2 cm, as well as adding higher quality seat cushions.

Seat pitch in economy class of seven A319s and 16 A320s will be reduced by one inch/2.5 cm from 30 inches/76.2 cm to 29 inches/73.7 cm, thus corresponding to normal European standards in the airline sector, Austrian Airlines (AUL) said.

The renovation of washrooms, including a rearrangement of toilets, will allow the addition of a row of economy (Y)-class seats.

The number of seats on the A320 will rise from 168 to 174. This means a capacity increase of +138 seats for the entire Airbus (EDS) fleet, an increase of 3% or an entire medium-haul aircraft.

For every aircraft, 14 days of ground time are needed for completion of work, mostly during a "C" check in the lower traffic winter season. Revamping work will be carried out with (AUL) in Vienna, as well as with Lufthansa Technik Budapest and with another partner in Tallinn.

The Airbus A321, Embraer (EMB), Fokker, and Bombardier (BMB) fleets will not be impacted by the changes in the economy (Y) class.

Regarding the project of a premium economy (PY) class on its long-haul fleet, “That this is no topic for our current six Boeing 767-300ERs, but could be maybe for our five Boeing 777s, which will be in service at least for the next six years,” Otto said.

A long-haul fleet rollover could be possible in 2020. (AUL) will also study the introduction of Boeing 777-300ERs.

November 2015: News Item A-1: Austrian Airlines (AUL) will offer 2x-weekly, Vienna - Mauritius service for its winter schedule.

(AUL) begins 4x-weekly, Vienna - Isfahan Airbus A319 service on April 4, 2016.

News Item A-2: "Austrian Airlines )AUL) to launch EMB-195 operations from January 4, 2016" by (ATW), 2015 Kurt Hofmann, November 13, 2015.

Lufthansa (DLH) subsidiary Austrian Airlines plans to launch its first Embraer EMB-195 scheduled flight from January 4, 2016, on the Vienna - Stuttgart route.

Austrian (AUL) acquired 17 former Lufthansa CityLine Embraer EMB-195s at a list price of nearly $900 million to replace its aging Fokker F 70/F 100 fleet.

Lufthansa CityLine in turn will receive Bombardier CRJ900 NextGen jets from Eurowings (EWG), which is to become an all-Airbus A320 operator.

“With the investment in the Embraer (EMB) fleet, there are also +1,000 new jobs in connection,” (CEO), Kay Kratky said in Vienna at a ceremony to present the new 120-seat jet.

(AUL) is expecting to take delivery of one additional E195 approximately every month.

The Embraer (EMB) jets have an average age of four years, compared to the average age of about 21 years with (AUL)’s Fokker F 70/F 100 fleet. The E195s use about -18% less fuel per seat.

Nearly 200 (AUL) pilots (FC) will be retrained to operate the Embraer (EMB) aircraft.

News Item A-3: Austrian Airlines (AUL) will sell its entire fleet of Fokker F 70 and F 100 short-haul airliners to Australian carrier, Alliance Aviation Services Ltd (AAS).

(AAS) is a prominent player in the fly-in, fly-out (FIFO) market, where personnel working at remote sites in enterprises such as mining or construction are transported by air to and from their workplace.

(AUL)’s Fokker fleet consists of 15 F 100s and six of the smaller F 70s. (AAS) already has a fleet of 15 F 100s and eight F 70s, and said it is the largest global operator of the type. It operates bases in Brisbane, Townsville, Cairns, Melbourne, Adelaide, Perth, and Auckland.

It is paying $15 million for the Austrian aircraft, which it will pay for through a combination of cash and a new share issue in (AAS).

The sale of the Fokkers will go hand-in-hand with the arrival at Austrian (AUL) of a batch of second-hand Embraer E195s from Lufthansa CityLine. (AUL) will start delivery of the Fokkers to (AAS) in December 2015, through to December 2017.

The Embraers were built between 2009 - 2012 and have an average current age of four years, compared to the average age of about 21 years of the Fokker fleet. The replacement program “will serve to significantly rejuvenate our fleet and offer Austrian Airlines (AUL) better unit costs,” (AUL) (CEO), Kay Kratky said.

(AAS) has had a long-running relationship with Austrian Technik Bratislava, which specializes in the repair and maintenance of Fokker aircraft. A long-term service agreement between (AAS) and Austrian Technik Bratislava was concluded in spring 2015.

December 2015: News Item A-1: Lufthansa (DLH) subsidiary, Austrian Airlines (AUL) plans to launch weekly, Boeing 767-300ER Vienna - Havana (Cuba) service from October 25, 2016, as part of a long-haul leisure market strategy.

(AUL), the Austrian flag carrier recently expanded services into North America with the launch of Boeing 777 5x-weekly, Vienna - Miami services on October 16. It also added weekly services from Vienna to Colombo (Sri Lanka) and to Mauritius from October 29.

(AUL), the Star (SAL) Alliance member also plans to add daily, Vienna - Shanghai Pudong 777-200ER services from April 4, 2016.

(AUL) stopped Vienna - Dubai services on September 13 due to overcapacity.

(AUL) (CCO), Andreas Otto said recently the long-haul market is still underserved from Austria; however, Otto said “there is a demand that has to be well managed. We have additional plans, but we don’t expect an additional wide body airplane before 2017. Long-haul demand from Vienna is also very seasonal.”

Austrian Airlines (AUL) expects to transport 1,269,000 passengers on long-haul routes this year.

(AUL) operates six Boeing 767-300ERs and five 777-200ERs in its long-haul fleet.

News Item A-2: "The Lufthansa Group is to Centralize Flight Operations in Vienna" by (ATW) Kurt Hofmann, December 8, 2015.

The Lufthansa Group, which is aiming to reduce overall management positions by -15%, has assigned Austrian Airlines (AUL) (CEO), Kay Kratky to take over responsibility for the Lufthansa Group’s Flight Operations in Vienna, as of January 1, 2016.

The move is part of Lufthansa (DLH)’s new organizational structure to reduce the current four management levels below the group’s executive board to three.

Kratky will act as process domain owner and (CEO)/(COO) of Austrian Airlines (AUL), including flight operations processes, safety, training, ops standards and ops control.

“This includes Lufthansa Passenger Airline (DLH), Swiss International Air Lines (CSR) and Austrian (AUL). The number of aircraft under Kratky’s responsibility will be around 490,” (DLH) spokesperson Andreas Bartels said on the sidelines of the Star (SAL) Alliance (CEO) meeting in Chicago.

The Lufthansa Group expects the new structure to harmonize and streamline Flight Operations.

“This decision outlines once again that Vienna and Austrian Airlines (AUL) play an important part of the entire Lufthansa Group,” Bartels added.

In September, (DLH) announced (AUL) (CCO), Andreas Otto will assume commercial responsibility for the Vienna Hub and take over responsibility for product management of Lufthansa (DLH)’s hub carrier.

The Lufthansa Group has approved a reorganization plan to enable member airlines and service companies to align their structures and processes. The realignment also aims to raise the group’s overall efficiency, reduce complexity and enable faster decision-making. The group expects the reorganization to eventually add +€500 million/+$65.3 million a year to its earnings results.

January 2016: News Item A-1: Austrian Airlines (AUL) launched its first Embraer E195 scheduled flight on January 4, 2016, on the Vienna - Stuttgart route.

The Lufthansa subsidiary acquired 17 E195s from former Lufthansa CityLine for nearly $900 million at list prices. They will gradually replace the 21 Fokker aircraft currently used by (AUL). Embraer jets have an average age of four years, compared to the average age of about 21 years with (AUL)’s Fokker F 70/F 100 fleet. The 120-seat E195s use about -18% less fuel per seat.

Robert Heusmann, (AUL)'s Project Mnager Embraer Integration said: “We are training a total of 200 pilots (FC) and 600 flight attendants (CA) specializing in this type of aircraft. In addition, more than >80 maintenance technicians (MT) at Austrian Technik have to conclude a separate course of studies to acquire the technical qualifications and official certification to carry out maintenance and repair work on the Embraer planes.”

The Embraer jets will be used on short- and medium-haul routes to Central and Eastern Europe such as Belgrade, Warsaw, and Tirana, but will also operate flights to Hamburg, Thessaloniki and many other destinations.

News Item A-2: Monarch Aircraft Engineering Limited now has a line-maintenance, technical-handling agreement with Austrian Airlines (AUL) for Airbus A320s and Embraer E195s at Manchester Airport.

News Item A-3: Austrian Airlines (AUL) began using Spairliners for Integrated Component Care effective January 2016. The long-term contract covers component pooling and repair solutions for 17 Embraer E195s. Spairliners has established a dedicated Information Technology (IT) interface between Austrian (AUL)’s (AMOS) maintenance (IT) system and its (SAP) system.

March 2016: News Item A-1: The Lufthansa Group has reported a 2015 net profit of +€1.7 billion/+$1.9 billion, up significantly from a net profit of +€55 million in 2014, although the main contributors were lower fuel prices and money received from withdrawing its stake in USA carrier JetBlue Airways (JBL).

(CFO), Simone Menne confirmed the improved results were helped by the “known effect of the (JBL) write-back of €503 million, as well as -€976 million less in fuel costs.”

It was reported February 18 that Lufthansa (DLH) shed its stake in USA-based carrier (JBL) after more than >7 years. The exit plan was through an early redemption of (DLH) bonds convertible into (JBL) shares.

Full-year revenue increased to €32 billion, up +6.8% from 2014, while capital expenditures were down 7.5% to €2.57 billion. The investments were made mainly in fleet and new on board products.

(DLH) Chairman & (CEO), Carsten Spohr told analysts and reporters in Frankfurt: “With the Germanwings (RFG) tragedy, 2015 was an emotionally very challenging year for the Lufthansa Group: a year of extremes. The numerous strikes were a further burden. Nevertheless, we continued to successfully work on our group’s future viability and our strategic realignment is progressing well.”

Spohr said the company has already paid a double-digit million euro amount to relatives and friends of those who were killed in the March 24, 2015 Germanwings (RFG) crash. It was discovered the Airbus A320 was flown deliberately into the French Alps during a scheduled flight from Barcelona to Düsseldorf, killing all 150 people aboard.

The adjusted (EBIT) of the Passenger Airline Group was €1.5 billion (compared to €701 million for 2014), doubling the adjusted (EBIT) margin to 6.1%.

The adjusted (EBIT) of Lufthansa (DLH) Passenger Airlines increased +143% to €970 million.

Results for Eurowings (EWG) (including Germanwings (RWG)) were also included in these numbers. Eurowings (EWG) alone (which will be reported separately from 2016 onward) achieved an adjusted (EBIT) of €8 million on revenues of €1.9 billion (a performance that “not only meets but exceeds the ambitious 2015 target of a break even for the group’s point-to-point business),” Spohr said.

“The doubling in the passenger airlines’ result is not only due to lower fuel costs, but also to the favorable developments in our passenger volumes and to our capacity discipline,” Spohr said.

Lufthansa (DLH) had been strict in aircraft capacity in 2015 and operated -15 fewer aircraft compared to the year before.

The group transported nearly 108 million passengers, which Spohr described as a new record. “We still have to reduce our fleet types further. We want to phase out three sub-fleets this year by phasing out Boeing 737, Fokker F 70/F 100 and Avro [aircraft]. By 2025, the Lufthansa Group will receive 251 new aircraft,” Spohr said.

Its subsidiary, Swiss International Air Lines (CSR) achieved earnings of +€429 million, an increase of +54% and an (EBIT) margin of 9.4%.

Austrian Airlines (AUL) posted earnings of +€52 million compared to +€9 million in 2014.

Lufthansa Group’s (ASK)s rose +3% to 268.1 billion, (RPK)s were up +2.7% to 214.6 billion, producing a load factor of 80.1% LF, up +0.3% over the year-ago period.

(CFO), Simone Menne said (DLH) plans to invest €2.7 billion in 2016 and €2.5 billion in the following years.

Nevertheless, (DLH) adjusted its planned growth for 2016 slightly downward as a result of worldwide instability. “In total, we are expecting a slight earnings improvement for the passenger airlines in 2016,” Menne said. “Unit costs for Lufthansa Passenger Airlines are still too high. That means competitive collective wage agreements are necessary. The wage negotiations at (DLH) Passenger Airlines are still ongoing,” Spohr said.

“For 2016 we are aiming to increase our result for the Lufthansa Group again, to enhance the profitability of our hub airlines by further modernizing their fleets and further increasing efficiency,” Spohr added.

April 2016: News Item A-1: "Austrian Airlines to Close Tokyo Route, and Open Hong Kong Service" by (ATW) Kurt Hofmann, April 7, 2016.

Lufthansa (DLH) subsidiary, Austrian Airlines (AUL) will end its route from Vienna to Tokyo Narita in September, and open a new service to Hong Kong.

(AUL) will terminate the Vienna - Tokyo Narita route from September 4 as a result of Japan’s economic slowdown, combined with the devaluation of the Japanese yen that began three years ago. “These circumstances made the Vienna - Tokyo route unprofitable,” (AUL) said. “The last Austrian Airlines (AUL) flight from Vienna to Tokyo will take place on September 3.”

Instead, (AUL) plans start a new 5x-weekly, Boeing 777-200ER Vienna - Hong Kong service on September 5. This route will open without the need for additional wide body airplanes.

Separately, (AUL) relaunched 5x-weekly, 777-200ER Vienna - Shanghai Pudong flights on April 6, which will increase to 7x-weekly May 1 because of high demand.

To be able to operate the new route to China, (AUL) had to axe its Delhi route to have wide body capacity available. As a result, Air India (AIN) also launched 3x-weekly, Boeing 787-8 Delhi - Vienna services on April 6, replacing Austrian (AUL)’s 5x-weekly service to the Indian capital.

(AUL) offers 29 weekly flights to Asia in the 2016 summer season, including daily services to Tokyo Narita, Bangkok, and Shanghai Pudong, 5x-weekly flights to Beijing, and 3x-weekly service to Astana (Kazakhstan).

In the fall, (AUL) will again offer an additional weekly flight to Colombo and Male.

The Astana route will be operated by Airbus A320 aircraft.

(AUL) operates six Boeing 767-300ERs and five 777-200ERs in its long-haul fleet.

Austrian (AUL) has 80 aircraft, including Airbus A320 family aircraft, Boeing 767/777s, Bombardier (BMB) Dash 8 Q400s, Embraer E195s and Fokker F 70/F 100s.

News Item A-2: Austrian Airlines (AUL) is set to recruit 160 new pilots (FC) and 400 flight attendants (CA) as it expands bilateral air traffic between Austria to Germany.

(AUL) has been offering four daily flights between Graz and Frankfurt since last week, which was previously served by Lufthansa (DLH). (AUL) has already added flight traffic between Innsbruck and Salzburg to Frankfurt to its route network.

(AUL) will also add +2 more Airbus A320s to its existing fleet of 29 A320-family aircraft.

It operates up to 296 weekly flights between Austria and Germany, including up to 119 flights from Austria’s federal provinces, and 177 from its Vienna hub. This includes flights from Graz, Innsbruck, Klagenfurt, Linz, Salzburg, and Vienna, to Berlin, Düsseldorf, Frankfurt, Hamburg, Cologne, Leipzig, Munich, and Stuttgart.

Austrian Airlines (AUL) said it has already begun searching for 130 fully trained pilots—so-called “ready entries”—to be deployed in flying Dash, Airbus (EDS) and Embraer (EMB) aircraft. It also plans to hire 30 prospective pilots (FC) or so-called “ab initios” as of the middle of 2016, and train them in cooperation with Lufthansa (DLH) Flight Training.

At the end of 2015, (AUL) employed 950 pilots (FC); the recruitment of new staff will increase this figure to about 1,030 pilots (FC).

(AUL) is also undergoing a massive training program as its replaces aging Fokker 70/100s with Embraer E195s. “That means every second pilot (FC) in our company undergoes a type rating for a different aircraft type," (CFO), Heinz Lachinger told ATW. "This is because we are adding 17 E195s to our fleet. We expect this transition mode will continue throughout 2017 [when the fleet rollover to E195s will be complete]. This costs a lot of money and is challenging for our organization.”

Austrian currently operates three E195s; a fourth aircraft will enter service shortly.

At the end of 2015, Austrian Airlines employed 2,030 flight attendants, which is expected to climb to about 2,260.

News Item A-3: Austrian Airlines (AUL) inaugurated its second Embraer (EMB) E195 on its Vienna - Warsaw route. It is the second of a total of 17 Embraer (EMB) aircraft that will be operated by (AUL) by the end of 2017 as part of its fleet renewal program. The E195 will gradually replace (AUL)’s 21 Fokker aircraft.

May 2016: The Lufthansa Group recorded a net loss of -€8 million/-$9 million for (1Q) 2016, reversed from a net profit of +€425 million for the year-ago period.

The group, which comprises Lufthansa (DLH), low-cost carrier (LCC) Eurowings (EWG), Austrian Airlines (AUL), and Swiss International Air Lines (CSR), made the loss on revenue of €6.91 billion, slightly down on last time’s €6.97 billion.

The Lufthansa group said the sharp reversal in profits compared to a year ago was because the previous year’s quarter included a +€503 million boost from the early conversion of a convertible bond with USA independent carrier, JetBlue Airways (JBL).

Even after stripping out this factor, however, (1Q) cash flow from operating activities declined -21.5% to €1.1 billion, the result of the increasing trend among customers of booking tickets closer to travel dates, which means money tended to accrue to the company later than in past years. However, that effect should even out over coming months, provided overall bookings remain at current levels, Lufthansa said.

Although the group enjoyed “significantly higher” passenger volumes, traffic revenue dipped -3.9%, a reflection of heavy downward pressure on pricing.

Despite the headline figures, the new business year had seen a “solid start,” Deutsche Lufthansa (CFO), Simone Menne said. “We are seeing significant pricing pressure at our passenger airlines, and even more at Lufthansa Cargo (LUB). “But the substantial unit cost reduction at our passenger airlines has more than made up for the pricing declines. And we are not just benefiting from further fuel cost reductions and non-recurring effects. We have also improved our operating cost structure. This marks an important change in trend in our unit cost development.”

There was a -4% reduction in unit costs, excluding fuel and currency conversion effects. Reduction in fuel costs was -€237 million over the period.

She added the new Eurowings (EWG) division had begun life well, with a “very encouraging load factor of 94.2% LF” on its long-haul services in the first quarter, with positive customer feedback. “Its first-quarter result is a decline on last year’s, but this partly reflects (EWG)’s startup costs and we feel that the new Eurowings (EWG) is well on track.”

While both Lufthansa (DLH) and Austrian Airlines (AUL) posted improved (EBIT) figures, SWISS (CSR) numbers dipped, mainly the result of reduced demand because of the strength of the Swiss franc. Lufthansa Cargo (LUB)’s figures, meanwhile, suffered from global overcapacity in the cargo market, particularly on transatlantic routes and it is bracing itself for a challenging financial year, the group said.

Looking ahead, it does not expect to see pricing pressures ease over the rest of the year, with yields under particular pressures to and from South America because of the region’s weak economy.

Bookings from Chinese and Japanese travel groups are also down. However, both Europe and North America (Lufthansa (DLH)’s largest and most important regions for traffic) are showing “more stable trends.”

July 2016: "Austrian Airlines to Cancel 300 Flights in July & August Amid Pilot Shortage" by (ATW) Kurt Hofmann July 1, 2016.

Lufthansa (DLH) subsidiary, Austrian Airlines (AUL) will cancel 300 flights in July and August because of the ongoing integration of 17 Embraer E195s into its fleet and related pilot (FC) training.

“Austrian Airlines (AUL) has always stood for punctuality and reliability. In order to live up to this reputation, we have decided to streamline our summer flight schedule,” (CEO), Kay Kratky said July 1.

(AUL) has been forced to repeatedly announce short-term flight cancellations over the past year. For example, last June, (AUL), the Star (SAL) Alliance member had to cancel 150 flights.

The latest decision has particularly affected regional flights, but not long-haul and holiday (charter) flights.

Austrian Airlines (AUL) will thin out its flight offerings to destinations it serves several times a day, thus bundling flight rotations. Typical destinations affected by the measures include Bucharest (Romania), Prague (Czech Republic), Sofia (Bulgaria), and Zagreb (Croatia).

To balance, (AUL) will cancel 300 flights, operating 23,000 flights. “However, in the light of our experience over the last year, I would prefer to ensure the reliability of 99% of our flight schedule instead of flying 100% [unreliable flights],” Kratky said.

Austrian Airlines (AUL) spokesperson, Peter Thier said (AUL) had planned to wet-lease five aircraft during the summer peak. However, only three wet-leased aircraft had been available, which did not meet (AUL)'s standard.

To fulfill its extensive pilot (FC) training standards, (AUL) launched a series of quality assurance measures in Flight Operations last year. In addition to improving flight planning, this also encompassed management changes and a massive increase in the number of new pilots (FC).

Austrian Airlines (AUL) has hired 110 pilots (FC) over the last 12 months and now employs about 1,000 pilots (FC); that number will increase to 1,070 by year-end.

The underlying problem is that about 10% of pilots (FC) cannot be deployed yet because of elaborate training, attributable to the career model of the collective wage agreement, which stipulates training must be carried out over a period of three to six months. (AUL) does not have standby reserves at its disposal in case of short-term unavailability of flight crews (FC).

Austrian Airlines (AUL) operates a fleet of 76 aircraft and flies about 320 flights each day.

August 2016: News Item A-1: Lufthansa (DLH) subsidiary, Austrian Airlines (AUL) plans to launch 3x-weekly, Vienna - Isfahan (Iran) services from September 4 as part of a new bilateral air transport agreement between Austria and Iran.

(AUL), the Austrian flag carrier said the underlying reason for its 2nd Iran destination is a new bilateral air transport agreement between the 2 nations, which could be renegotiated for the 1st time in 30 years. Because of the ongoing coordination process, (AUL) recently had to delay the planned commencement of the Isfahan service from April 2016 to September 2016.

Vienna - Isfahan services will become 4x-weekly starting from summer 2017.

Since March 2016, (AUL) Austrian expanded Iran operations with the launch of a 2nd daily, Vienna - Teheran Imam Khomeini International Airport service.

(AUL), the Star (SAL) Alliance member operates single-aisle Airbus (EDS) A320 family aircraft to both destinations in Iran compared to other European carriers, which mainly use wide bodies on Teheran routes.

Austrian Airlines (AUL) will operate up to 17 weekly flights to Iran as of September 2016.

News Item A-2: 2 Embraer E190-200LR (0486 OE-LWH; 0507, OE-LWJ) ferried Bratislava to Vienna for entry into service.

September 2016: News Item A-1: Lufthansa Group subsidiary Austrian Airlines (AUL) launched 5x-weekly Vienna - Hong Kong services on September 5, its 3rd destination in China after Shanghai Pudong and Beijing. “We expect to transport 30,000 passengers to Hong Kong until the end of 2016 (120,000 passengers per year from 2017 onward),” (AUL) (CCO) Andreas Otto said in Hong Kong.

With the Vienna - Hong Kong service, the Lufthansa Group (which includes Lufthansa (DLH), Swiss International Air Lines (CSR) and Austrian (AUL)) flies to 19 destinations in 6 countries, offering a total of 239 weekly flights from Europe to Asia.

On September 4, (AUL) terminated the Vienna - Tokyo Narita route after 27 years as a result of Japan’s economic slowdown, combined with the devaluation of the Japanese yen that began 3 years ago. (AUL) has placed the Boeing 777-200ER airplane on the Hong Kong route.
“The economy in Hong Kong is expected to retain a trend growth of +3% per annum from 2017 to 2020,” Otto said, adding that he hoped the route would become profitable within 2 years.

“However, fierce competition, especially by Gulf carriers has made business in Asia very difficult for us. (AUL) is fighting to sustain its Asian network. Nevertheless, we had to close down 3 destinations (Dubai, Delhi, and Tokyo) for economic reasons.”

He added, “The Lufthansa Group has given up more destinations in Asia (Jakarta, Kuala Lumpur among others) than it was able to open new ones.”

40% of (AUL)’s Asian traffic is focused on China. During the current summer schedule, the 3 Lufthansa Group carriers operate to 6 destinations in China on >90 weekly flights from Frankfurt, Munich, Zurich and Vienna to Hong Kong Peking, Shanghai Pudong, Nanjing, Qingdao, and Shenyang.

Separately, Otto said (AUL) is considering introducing a premium-economy (PY) class on long-haul flights to accommodate the changing service demands of global air travelers. “We are investigating premium economy (PY). This product could be attractive for us, because Lufthansa (DLH)’s premium-economy (PY) class is already a huge success. A decision will be made before the end of this year,” Otto said.

(DLH) launched its 1st premium-economy (PY) class service on November 22, 2014.

News Item A-2: Lufthansa Group subsidiary Austrian Airlines (AUL) will add +2 more Airbus A320s to its fleet this year and 1 additional Boeing 777-200ER from summer 2018, representing an investment value of >€100 million/$112 million.

As a result, >230 jobs will be created at (AUL)’s Vienna hub.

“The conclusion of the collective bargaining agreement for the flight crew (FC) and positive signals from political decision-makers with respect to Vienna as a flight hub, ensure a good investment climate,” (AUL) (CEO) Kay Kratky said.

The A320s were leased from the Lufthansa Group for approximately 8 years, representing an investment value of €50 million, including conversion costs. The 2 aircraft will be deployed on Innsbruck - Frankfurt, Salzburg - Frankfurt, Graz - Frankfurt, and Vienna - Munich routes.

(AUL) currently operates 7 Airbus A319s, 16 A320s and 6 A321s.

The additional 777 airplane will be on an 8-year lease contract with Irish lessor AerCap (DEA), representing an investment value of €60 million, including conversion costs. The 777 will be used for new possible routes to Asia, America, and Africa.

(AUL) has approved premium-economy (PY) class on long-haul airplanes, which will be launched in summer 2018.

The 767 will offer 18 premium-economy (PY) seats and the 777 will offer 24 premium economy (PY) seats, a €15 million investment.

Separately, Lufthansa Technik (DLH) (LTK) is set to begin installing Inmarsat’s (GX) Aviation Ka-band antenna on (AUL)’s 31 A320 family aircraft. In November, the system will be tested and is expected to be available from December. The entire Airbus (EDS) fleet is scheduled to be upgraded by the 2017 summer flight schedule. Investments for the project will amount to €5 million.

Commenting on long-haul fleet upgrades, (CFO) Heinz Lachinger said (AUL) will make a decision on modernizing its 6 767-300ER and 5 777-200ER airplanes. “The existing fleet of long-haul airplanes will begin to reach the end of their useful economic lives starting in 2020. In this case we will be talking about an investment sum, which is clearly >€1 billion,” he said without disclosing further details.

(AUL) operates a fleet of 78 airplanes.

November 2016: The Austrian government will cut local aviation taxes 50% by January 2018. Pending government approval, taxes should be reduced by -25% in 2017 and -25% the following year. The tax, which has become a burden for the industry, was implemented in 2011. Passengers boarding in Austria were charged €7/$9.60 for short-haul flights, €15 for medium-haul flights and €35 for long-haul flights.
“We would welcome such a move [reducing the aviation tax], which we see as a positive sign. Our competitive disadvantage will be then reduced,” Austrian Airlines (AUL) spokesperson Peter Thier said.

In 2015, airlines operating to and from Austria contributed €107 million to Austria’s ministry of treasury. “[Lufthansa Group subsidiary] (AUL) itself delivered €32.5 million, about 30% of this aviation tax. The Lufthansa Group paid €50.7 million, 47% of the €107 million,” Thier said. Reducing the local aviation tax is expected to increase Austria’s competitiveness in Europe and improve tourism business. Vienna Airport stated in an analysis that, without this tax, Austria could generate 1 million additional passengers annually.

Separately, Austrian Airlines (AUL) continues to invest in its Vienna hub. (AUL) plans to add +2 Airbus A320s to its fleet (1 has been delivered and +1 more will be delivered in December. Also, a Boeing 777-200ER will be delivered in 2018. As a result, >230 jobs will be created at (AUL)’s Vienna hub.

December 2016: News Item A-1: "Lufthansa Acquires Brussels Airlines, to Become Part of Eurowings (EWG)" by (ATW) Kurt Hofmann, December 15, 2016.

The Lufthansa Group has taken over 100% of SN Airholding, the parent company of Brussels Airlines (DAT)/(EAD), in a deal to fully integrate the Belgian carrier into Lufthansa (DLH)’s Eurowings (EWG) Group in 2018.

(DLH)’s supervisory board agreed to exercise a call option on the remaining 55% stake, effective December 31. The transaction will close by the beginning of January 2017. The price for the acquisition of the remaining 55% of the shares is €2.6 million/$2.8 million, which will be transferred to a consortium of 30 shareholders.

“We have seen a series of radical changes in the industry and, over the last several months, competition has increased to a high level. We see a lot more consolidation to come. The strong [airlines] are getting bigger and this is what (DLH) intends to do,” Lufthansa Group (CEO) Carsten Spohr said

(DLH) said Brussels Airlines (DAT)/(EAD)’s attractive market, its established African network and its advantageous cost structure (which has allowed the airline to compete with the tough low-cost competition in the Belgian market) will further strengthen the Lufthansa (DLH) and Eurowings (EWG) market position.

“Africa is one of the reasons we have invested in (DAT)/(EBA), and only airlines that have a highly competitive cost structure have a place in the Lufthansa Group,” Spohr said. After the acquisition, Brussels Airlines will operate its 23 long-haul routes, as well as 79 destinations in Europe, under the umbrella of the Eurowings Group.

“With Brussels Airlines, the Eurowings Group will grow to 180 aircraft. Creating a more pan-European Eurowings is a big step in that direction. The Lufthansa Group is number one in Brussels. Aviation in Belgium needs a stronger partner,” Spohr said.

Lufthansa acquired a 45% share of SN Airholding 8 years ago. “In 2008 we had only 3 long-haul aircraft. Today we have 9, and soon we will fly to Mumbai. All this would not have been possible without (DLH),” SN Airholding board Chairman Viscount Etienne Davignon said. Between 2013 and 2015, passenger numbers have increased +30% to 7.5 million. The brand Brussels Airlines will, over time, be complemented by the claim “member of the Eurowings Group,” he said.

Brussels Airlines’ fleet harmonization toward an Airbus A320 family fleet for the European network will be continued. The fleet comprises 42 short- and medium-haul aircraft, including 2 in wet lease, and 9 A330s. “We are sure that a big joint decision will be the future long-haul fleet of Brussels Airlines,” Spohr said.

In the past 3 years, Brussels Airlines has reduced overall costs by -15%. For the fiscal year of 2015, Brussels Airlines generated an operating profit of +€43.4 million. With the full integration of Brussels Airlines, synergies will add up to a mid-double-digit million euro amount per year. “We understand the local brand. We believe there is a need to connect Europe to the world and not to be connected [from others]. Today 120,000 people work for Lufthansa, which will increase to 124,000 [with Brussels Airlines], and we are getting to 700 aircraft next year,” Spohr said.

“Over the past 8 years, our collaboration with (DLH) has proven its potential to create perspectives and safeguard jobs. Furthermore, the Lufthansa Group will enable us to expand our African reach by positioning Brussels as the Sub-Saharan Africa Hub of the Lufthansa Group,” Davignon said.

The Brussels Airlines management board remains unchanged under the leadership of (CEO) Bernard Gustin. In addition, an advisory council will be established and will support the integration process.

News Item A-2: "Lufthansa, Etihad Finalize Code Share, Wet Lease of 38 Airberlin Aircraft" by (ATW) Kurt Hofmann, December 16, 2016.

The Lufthansa Group and Abu Dhabi-based Etihad Aviation Group have finalized a code share deal and wet-lease agreement for 38 airberlin (BER) Airbus A319/A320 aircraft operating for Eurowings (EWG) and Austrian Airlines (AUL). The code share deal, which is subject to government approval, is set to begin in January 2017.

The 6-year wet-lease agreement, effective February 2017, is also subject to regulatory requirements. Of the 38 former (BER) aircraft, Eurowings (EWG) will operate 33 and Austrian Airlines (AUL) will operate 5.

Lufthansa Group Chairman & (CEO) Carsten Spohr said, “We are looking forward to partnering with the Etihad Aviation Group. The wet-lease contract with airberlin (BER) fosters the growth of our Eurowings (EWG) Group. The code share agreement of Lufthansa (DLH) and Etihad (EHD) will offer our customers more benefits and complement both airlines’ networks. We will consider extending our cooperation in other areas.”

Eurowings also announced it will establish a new base at Munich Airport, where it will base 4 A320 family aircraft initially. Additional aircraft will be placed in Vienna and Palma de Mallorca.

As a result of the wet-lease agreement, Eurowings said it is able to phase out up to 20 older A320s, reducing overcapacity. Airberlin said it could reduce restructuring costs. On September 28, (BER) released details of its restructuring plan, which hinged on placing up to 40 A320s with the Lufthansa Group and reducing employee positions by up to 1,200.

Under the code share agreement, Lufthansa (DLH) will place its LH code on Etihad Airways (EHD)’s 2x-daily flights between Abu Dhabi and Frankfurt and 2x-daily Abu Dhabi - Munich services. (EHD) will, in turn, put its EY code on (DLH)’s flights between Frankfurt and Rio de Janeiro, Brazil as well as Bogota, Colombia.

Etihad Aviation Group President & (CEO) James Hogan said, “We have long seen Germany as a key strategic market for the Etihad Aviation Group and this new relationship with (DLH) marks the next step in our commitment to the leading European Aviation Group.”

On December 5, oneworld (ONW) member airberlin (BER) announced the sale of 49.8% of its Austrian subsidiary FlyNiki (NKI) to Etihad (EHD) for €300 million/$320 million, to create a new European leisure airline in a joint venture (JV) with German travel company (TUI) Group (TUG).

On December 15, the Lufthansa Group took over 100% of SN Airholding, the parent company of Brussels Airlines (DAT)/(EBA), in a deal to fully integrate the Belgian carrier into Lufthansa (DLH)’s Eurowings (EWG) Group in 2018.

Airberlin (BER) reported a 3rd-quarter loss of -€45.6 million, reversed from a +€56.2 million profit in the year-ago period.

News Item A-3: "Lufthansa & Etihad: From Enemies to Partners" by Karen Walker in (ATW) Editor's Blog, December 16, 2016.

Lufthansa (DLH) and Etihad (EHD), in the past, have fought over airberlin (BER) code share rights, specifically and more broadly over Gulf carrier growth and subsidy allegations. Today, the 2 became business partners, completing a code share and wet-lease agreement that links together Germany’s Lufthansa Group and Abu Dhabi-based Etihad Aviation Group, ironically with airberlin (BER) aircraft at the center of the deal.

Etihad (EHD), which owns a 29% stake in airberlin (BER), has agreed to wet-lease 38 airberlin (BER) Airbus A320 family aircraft to the Lufthansa Group, which will use them to operate routes for 2 of its airline units, Eurowings (EWG) and Austrian Airlines (AUL). The agreement is particularly important for low cost carrier (LCC) (EWG), which (DLH) is looking to grow more rapidly.

Meanwhile, (DLH) will place its LH code on Etihad Airways (EHD)’s 2x-daily flights between the 2 airlines’ respective home hubs of Abu Dhabi and Frankfurt, and on 2x-daily Abu Dhabi - Munich services. (EHD) will put its EY code on (DLH)’s flights from Frankfurt to Rio de Janeiro and Bogota.

Both elements of the partnering arrangement are subject to regulatory approval, but if accomplished, it will be the latest example of a legacy flagship and a Gulf carrier becoming "dance partners." British Airways (BAB) parent the (IAG) was the icebreaker; (IAG) (CEO) Willie Walsh and Qatar Airways (QTA) Group (CEO) Akbar Al Baker forged a deal that made (QTA) a stakeholder in the (IAG) (a stake later increased to 20%). Walsh was also instrumental in getting (QTA) into the Oneworld (ONW) Alliance (joining Oneworld (ONW) Alliance Founder member (BAB) and also, oddly enough, airberlin (BER)). Qatar Airways (QTA) is now also taking a 10% stake in the (LATAM) Airlines Group (LAN)/(TPR).

Some accused Qantas (QAN) (CEO) Alan Joyce of doing a deal in 2013 with the devil when he signed a 10-year global partnership with Emirates (EAD), the largest of the “big 3” Gulf carriers. Although no investment stake was involved, the deal permitted extensive coordination and allowed (QAN), the Australian flagship to cut back its own European flights and connect to Emirates (EAD)’s broad European network, even shifting its European connecting hub from Singapore to Dubai. Lucifer has been lucrative; restructuring and partnerships have helped Qantas (QAN) climb from A$2.8 billion/$2.1 billion net loss in its fiscal year through June 2014 to a record profit of A$1 billion for the 2015/2016 fiscal year (the best result in its 95-year history).

Now we have Lufthansa (DLH) and Etihad (EHD) in a "dance," with the Group (CEO)s of each replacing subsidy barbs with hints of a greater future together. “We are looking forward to partnering with the Etihad Aviation Group,” Lufthansa Group Chairman & (CEO) Carsten Spohr said. “We will consider extending our cooperation in other areas.”

Etihad Aviation Group President & (CEO) James Hogan responded, “This new relationship with Lufthansa (DLH) marks the next step in our commitment to the leading European aviation group.” Perhaps it’s simply a case of 2 smart businessmen realizing they are better off working together than fighting in an industry environment that gets only more challenging. Hogan has often noted that (EHD)’s 2 biggest competitors are those in his backyard. Emirates (EAD) and Qatar Airways (QTA) have become stronger competitors through their partnerships with legacy and other carriers. The Lufthansa Group, though performing well, is still in cost restructuring catch-up mode relative to the (IAG); and both airberlin (BER) and Eurowings (EWG) are loss-making. The new partnership could yield returns across each group’s portfolios and make them more resilient to the competition and economic upheavals in their home markets as well as in the all-important transatlantic market. Most significantly, the Lufthansa (DLH) - Etihad (EHD) tie-up perhaps represents the end of any global attempt to constrain the Gulf carriers by regulatory means. From here on, should the USA majors choose to continue that fight, they’ve probably lost Lufthansa (DLH) as a public supporter. And Air France (AFA), still mired in its own restructuring, seems to believe it can tackle Gulf competition by starting a low-cost, long-haul carrier dedicated to that purpose.

Keep your friends close, and your enemies closer, the saying goes. Abu Dhabi-German relations have transformed, perhaps by necessity, from chilly to sunny-warm. Let’s see what can be achieved when you quit fighting and start working on how to better compete with your enemy’s enemy.

News Item A-4: Lufthansa Group low-cost (LCC) subsidiary, Eurowings (EWG) and German public services trade union Verdi have reached a labor agreement for cabin crews (CA)s on December 2. According to the agreement, flight attendants (CA) will see a +2.5% wage increase backdated from October 1, 2016; a further +2.5% increase October 1, 2017; and another +1.25% increase October 1, 2018.

Eurowings (EWG) cabin chiefs (Chefs de Cabine) will now be managed as pursers and will be compensated based on a separate purser (wages tariff) table, which will see increase of +5% as of October 1, 2016; +2.5% as of October 1, 2017; and +1.25% as of October 1, 2018.

The collective agreement expires March 31, 2019.

The Dusseldorf-based Eurowings (EWG) will also offer this deal to the (UFO) flight attendant (CA) union. “With this financial statement, we have gone to the limits of what is economically justified in a difficult market environment. The agreement is an important milestone on the way to the solution of the tariff conflicts in the (EWG) cabin,” Managing Director Jörg Beißel said.

On November 1, it was reported that (EwWG) flight attendants (CA), represented by the (UFO) union, had postponed a 2-day strike even though the latest negotiations failed to reach an agreement. Previously, (EWG) flight attendants (CA) went on a 24-hour strike October 27, resulting in 393 flight cancellations out of 551 scheduled flights for the day, affecting 40,000 passengers.

Lufthansa (DLH) established (EWG) as a pan-European (LCC) platform, which is expected to grow to 100 aircraft, as competition from (LCC)s (such UK’s easyJet (EZY), Ireland’s Ryanair (RYR) and Spain’s Vueling (VUZ)) increases to a 50% market share in Europe.

News Item A-5: "German Pilots' Union Says to Resume Talks with Lufthansa" by Maria Sheahan, "Reuters" December 09, 2016.

German pilots' union Vereinigung Cockpit said it would resume wage talks with Lufthansa (DLH) and would hold off further strikes until the end of negotiations. It said on December 9th it would discuss options including mediation in these talks.

The union is currently reviewing (DLH)'s latest pay offer, which came after 6 days of strikes last month that cost the (DLH), the German flagship carrier EUR100 million/US$106 million in lost profit.

News Item A-6: "Lufthansa, Pilot Union Agree to Arbitration" by (ATW) Kurt Hofmann, December 16, 2016.

Lufthansa (DLH) and the Vereinigung Cockpit (VC) pilot (FC) union have agreed to arbitration by the end of January 2017, in an effort to resolve a pay dispute that has resulted in repeated strikes. The
(VC) union has agreed to maintain industrial peace until then.

On December 13, it was reported that the latest round of (VC) pilot strikes will affect Lufthansa Group earnings by €100 million/$106 million in the 4th quarter. In November, (VC) called members to go on strike for 6 days, forcing Lufthansa (DLH) to cancel 4,500 flights, affecting more than half a million passengers.

According to a December 16 statement from Lufthansa (DLH), the parties have not publicly identified the mediator. “We have had some intense talks over the past months and have now succeeded in agreeing on arbitration for the collective wage agreement. The negotiating table is the only place where we can find solutions that offer prospects for employees and for the company,” (DLH) Head of Human Resources & Legal Affairs Bettina Volkens said.

“I am confident that we will be able to develop a fair solution with the assistance of a mediator. We want to arrive at a long-term industrial peace in cooperation with (VC) (for our customers, our employees and our shareholders),” Volkens said.

News Item A-7: The Competition Commission of Singapore (CCS) has approved a proposed joint venture (JV) between Lufthansa (DLH) and Singapore Airlines (SIA), subject to certain voluntary conditions.

On February 5, (DLH) and (SIA) sought permission to cooperate on routes between the Asia-Pacific region (Australia, Indonesia, Malaysia and Singapore) and Europe (Austria, Belgium, Germany and Switzerland).

The (CCS) said the 2 airlines were looking for clearance to work together on pricing, inventory management, sales and marketing. They also asked to coordinate schedules, capacity and revenues on services from Singapore to Frankfurt, Düsseldorf, Munich and Zurich. However, (DLH) and (SIA) hold 80% of the Singapore - Frankfurt and Singapore - Zurich market, so the (CCS) said price and capacity coordination on these routes “would raise competition concerns.” The (CCS) was particularly worried about capacity reductions and fare increases, should the (JV) be approved.

The 2 airlines offered to maintain and increase capacity on both routes and carry a minimum number of Singapore passengers. An independent auditor will also be appointed to monitor compliance with the conditions. “The (CCS) is of the view that the competition concerns identified by the (CCS) on these 2 routes will be addressed with these commitments, and the proposed (JV) will result in net economic benefits to Singapore,” the regulator said, approving the (JV).

News Item A-8: "International Airlines Increase Capacity, Frequencies to Russia" by (ATW) Polina Montag-Girme, December 2016, 2016.

Thai Airways (TII) has relaunched Bangkok Suvarnabhumi - Moscow Domodedovo Boeing 777-200/300 service on December 15. It will operate 4x-weekly flights on the route. (TII), the Thailand flag carrier ceased Moscow operations in March 2015 because of weak demand. However, in the 1st 8 months of 2016, traffic from Russia to Thailand grew +20%, Thai Airways (TII) VP Bryan Banston said. From 2005 when (TII) started to fly to Domodedovo, it has performed 3,400 flights from this airport to Bangkok; the highest frequency, 5x-weekly, was reached in 2014. This year, passenger traffic exceeded >100,000, Domodedovo International Airport said.

Singapore Airlines (SIA) is set to increase the number of Singapore - Moscow Domodedovo frequencies from 4x- to 5x-weekly from May 30, 2017, simultaneously adding 5th freedom rights on the Moscow Domodedovo - Stockholm portion of the flight from Singapore. (SIA) launched Airbus A350-900 flights, which replaced the Boeing 777, on Singapore - Moscow service on December 15. (SIA) is the 1st carrier flying the A350-900 to Russia.

Lufthansa Group subsidiary Austrian Airlines (AUL) uses the Boeing 777 on Vienna - Moscow Domodedovo service, replacing A320 family and 737 aircraft. (AUL) performs 11x-weekly flights between the cities. (AUL) has flown to Domodedovo for nearly 10 years, carrying 1.96 million passengers, Domodedovo said. At the beginning of 2015, Austrian FlyNiki (NKI) ceased Vienna - Moscow flights and Transaero Airlines (TXD) stopped flying on the route because of bankruptcy.

In October, Dubai-based Emirates Airline (EAD) increased Dubai - Moscow Domodedovo capacity, reintroducing the A380 on 1 out of 2 daily services. According to Domodedovo, Dubai traffic increased +20% in November year-over-year.

(KLM) Royal Dutch Airlines plans to double Amsterdam - Saint Petersburg Boeing 737 service frequency from 1 to 2 daily flights from February 18, 2017. This will increase the number of long-haul flights connections at Schiphol Airport, Saint Petersburg Pulkovo International Airport said.

News Item A-9: Lufthansa (DLH) subsidiary Austrian Airlines (AUL) will expand European services with +46 additional frequencies in the 2017 summer flight schedule, effective March 26, 2017, using 5 wet-leased airberlin (BER) Airbus A320s.

On December 16, Germany’s Lufthansa Group and Abu Dhabi-based Etihad Aviation Group finalized a code share deal and wet-lease agreement for 38 airberlin (BER) Airbus A319/A320 aircraft operating for Eurowings (EWG) and (AUL). “The 5 aircraft from airberlin (BER) enable us to clearly expand our European flight offering. We made a conscious decision to increase frequencies to established routes,” Austrian Airlines (AUL) (CCO) Andreas Otto said. The 5 aircraft are part of a 6-year wet-lease agreement.

Austrian Airlines (AUL) will offer +46 extra flights each week from Vienna to Hamburg, Milan Malpensa, Paris Charles de Gaulle, Stockholm Arlanda, and Zurich.

The 5 airberlin (BER) A320s will be operating in Austrian Airlines (AUL) colors. As a result, the (AUL) A320 family fleet will grow to 36 aircraft. Starting with the 2017 summer flight schedule, (AUL), the Star (SAL) Alliance member will operate 7 Airbus A319s, 23 A320s and 6 A321s. The fleet expansion, as well as new routes and increased frequencies, are all subject to approval by the Federal Competition Authority.

February 2017: E190-200LR (0350, OE-LWC), was ferried Vienna to Warsaw for painting in January, and returned in new Austrian Airlines (AUL) colors.

March 2017: News Item A-1: The Lufthansa Group turned in a net profit of +€1.78 billion/+$1.90 billion in 2016, up +4.6% on the previous year’s figure of +€1.70 billion, the Germany-based organization said March 16. It achieved the profit on turnover down -1.2% at €31.6 billion. “In a very demanding market environment, we successfully kept the Lufthansa Group’s margins at their record prior-year levels, through consistent capacity and steering measures and, above all, through our effective cost reductions,” Chairman of the executive board and (CEO) of Deutsche Lufthansa (DLH) Carsten Spohr said.

“All our business segments developed positively in their respective markets. And by expanding our commercial joint ventures for the network airlines, fully acquiring Brussels Airlines (DBA)/(EAT) and concluding the comprehensive wet-lease agreement with airberlin (BER) we have also strengthened our strategic position.” He cautioned, however, that further cost reductions would be necessary in 2017: “This is the only way to meet and master the decline in unit revenues and higher fuel expenses.”

Among cost-saving measures introduced in 2016 was a move to a new pension system that added +€652 million to the (EBIT) figure.

“The change in the pension system for our cabin crews (CA), which we now also agreed with our cockpit crews (FC), has had a sustainable positive effect, strengthening our balance sheet and making us less dependent on volatile interest rate developments,” Deutsche Lufthansa (CFO) Ulrik Svensson said. “This shows how important it is to have viable and forward-looking collective labor agreements.”

Among debits on the balance sheet for the past year was €100 million in strike costs. Net profit figures for the individual components of the Group were not given, but Lufthansa Passenger Airlines (DLH) raised its adjusted (EBIT) by +€254 million to >€1.1 billion. Austrian Airlines (AUL) was also in the black with an adjusted (EBIT) of €58 million, a +€6 million improvement on 2015.

SWISS (CSR) remained the Group’s most profitable airline with an adjusted (EBIT) margin of 9.3% and an adjusted (EBIT) of SFr429 million/$430 million compared to SFr453 million last time. Low-cost carrier (LCC) Eurowings (EWG) reported an adjusted (EBIT) of €-91 million. More than half of that deficit could be attributed to startup costs and other non-recurring expenditures, the Group said.

Also in the red was Lufthansa Cargo (LUB), which recorded a -€50 million loss for the year. The sharp -€124 million decline compared to its 2015 result was largely because of significant falls in price levels, particularly in the face of massive overcapacity in the freight sector.

On the ground, Lufthansa Technik (DLH)/(LTK) reported an adjusted (EBIT) of €411 million for 2016 (down -€43 million on 2015), while caterer (LSG) achieved an adjusted (EBIT) of €104 million (up +€5 million).

In 2017, the Group’s passenger airlines are expected to record organic capacity growth of +4.5% for its passenger airlines. Brussels Airlines (DBA)/(EBA), whose results will be fully consolidated for the 1st time in 2017, and the wet-leased flights of airberlin (BER), should make a small positive contribution to earnings in their 1st year.

News Item A-2: Vienna Airport said it had appealed to Austria's highest courts against an earlier court decision blocking its planned expansion for environmental reasons. An Austrian administrative court blocked the construction of a 3rd runway at Vienna's airport last month, saying it would run counter to the country's pledge to the Paris climate agreement.

Prosecutors said on Wednesday they had opened an investigation into 2 officials for alleged abuse of office over their involvement in the decision.

The ruling, which law experts see as trend-setting for other major infrastructure projects in Europe, attracted hefty criticism from politicians and business people but also praise from environmentalists.

Airport expansion is a hot topic in Europe, pitting local residents and environmentalists against airlines and airports facing increased global competition.

One basis for the appeal was the violation of essential constitutionally anchored rights such as freedom of ownership, freedom to carry on a business and the principle of equality, said Guenther Ofner, member of Vienna Airport's management board at a news conference in Vienna.

He said the legal provisions used to justify the court decision to prevent the construction of a 3rd runway were arbitrary and incorrectly interpreted.

News Item A-3: Embraer (EMB) E190-200LR (0423, OE-LWE), ex-(D-AEBG) ferried Munich to Bratislava for painting.

April 2017: News Item A-1: Austrian Airlines (AUL) launched 6x-weekly summer season Vienna - Los Angeles (LAX) services April 10, its 6th North American destination and 1st route to the USA west coast.

(AUL) operates a Boeing 777-200ER on the flight, which at 9,900km sector is also its longest. “We are already very firmly established with respect to the eastern part of the USA, operating flights to Chicago, Miami, Washington [Dulles], and 2 airports in New York [(JFK) and Newark],” (CFO) Heinz Lachinger said on board the 1st flight.

(AUL) a Star (SAL) Alliance carrier expects about two-thirds of (LAX) passengers will transfer at its Vienna hub. “We see a strong demand in terms of point-to-point traffic between Vienna and Los Angeles as well,” (CEO) Kay Kratky said recently.

News Item A-2: "SWISS (CSR), Austrian (AUL) and Lufthansa (DLH) Abolish 2-persons-in-the-cockpit Rule" by (ATW) Kurt Hofmann, April 28, 2017.

Lufthansa Group subsidiaries Swiss International Air Lines (SWISS) (CSR), Austrian Airlines (AUL) and Lufthansa (DLH) will abolish a rule requiring 2 people in the cockpit, effective May 1.

The carriers will revert to previous cockpit access provisions, plus a number of additional safety and security measures. Austrian Airlines (AUL) spokesperson Peter Thier said that (AUL) will “revert to the previous cockpit access provisions on our Airbus (EDS), Boeing (TBC) and Embraer (EMB) fleet. The only exclusion is our [Bombardier] Dash 8-Q400 fleet,” he said.

The Lufthansa Group introduced the 2-persons-in-the-cockpit rule as a precautionary measure after a Germanwings (RFG) Airbus A320 (en route from Barcelona to Düsseldorf) was deliberately flown into the French Alps March 24, 2015, killing all 150 people aboard. Investigations revealed that co-pilot Andreas Lubitz, alone on the flight deck, switched the selected altitude from 38,000 ft to 100 ft (the minimum value possible on an Airbus A320) and increased the speed of the aircraft, setting in motion an intentional fatal descent into the French Alps.

In March 2015, the European Aviation Safety Agency (EASA) issued a temporary recommendation, proposing that 2 crew members, including at least one qualified pilot (FC), should occupy the cockpit during flight. This was not a requirement.

(EASA) revised its recommendation in summer 2016, offering airlines the option of abolishing this “2-persons-in-the-cockpit” rule, provided they met the relevant further criteria.

According to SWISS (CSR), the action to abolish the rule follows an extensive safety and security review, which concluded the rule does not enhance flight safety, and actually introduces additional risks to daily operations. The decision has been coordinated with similar risk assessments by its Lufthansa Group airlines partner.

(CSR), (AUL) and (DLH) said they meet all the requirements required by (EASA) of any airline seeking to abolish the rule, which include:

* Ensuring suitable selection criteria and procedures to assess the psychological and safety-relevant demands made on pilots;

* Ensuring stable employment terms and conditions for cockpit personnel;

* Giving pilots (easy) access to any psychological or other support programs they may need; and

* Demonstrating an ability as a company to minimize the psychological and social risks to which pilots are exposed, such as loss of license.

SWISS (CSR) said its decision to abolish the 2-persons-in-the-cockpit rule is supported by the Swiss Federal Office of Civil Aviation.

May 2017: (GX) Aviation broadband launch customers Lufthansa (DLH) and Austrian Airlines (AUL) have completed their 4-month Ka-Band internet trial on short- and medium-haul flights and have transitioned over to a paid service. “The commercial service introduction follows the completion of a test program, lasting approximately 4 months, during which performance targets were successfully met and feedback from passengers as well as Lufthansa Group cabin crew (CA) was extremely positive,” connectivity provider Inmarsat said.

Passengers traveling on equipped aircraft can access high-speed internet on their mobile devices via 3 packages, priced at €3/$3 for messaging (FlyNet Message), €7 for general web browsing (FlyNet Surf) and €12 for video streaming (FlyNet Stream). Ultimately, passengers will also be able to pay for internet access with Air Miles or via roaming partners.

“This is a significant milestone for (GX) Aviation too, which took >5 years to develop as the world’s 1st in-flight broadband solution with seamless global coverage delivered through a single operator,” Inmarsat Aviation President Leo Mondale said.

Lufthansa Group plans to ultimately fit approximately 300 Airbus A320-family aircraft with the service under a 10-year strategic partnership with Inmarsat.

To date, almost 80 Lufthansa Group aircraft have been equipped, including 19 at Lufthansa (DLH), 31 at Austrian Airlines (AUL) and 29 at Eurowings (EWG). “(EWG) is also set to launch its commercial services in the coming weeks,” Inmarsat said.

(DLH) became the 1st airline to offer internet access on long-haul flights in January 2003, but the service was discontinued in 2006 when satellite operator Connexion by Boeing (TBC) ceased operations.

In December 2010, (DLH) resumed internet access on intercontinental flights and both (DLH) and (EWG) have offered Wi-Fi across their entire long-haul fleet since 2015. “After the Boeing 777 had joined their fleet, SWISS (CSR) also offered internet access on long-haul flights and is currently planning to introduce internet on board its short- and medium-haul flights from 2018 onwards,” (DLH) said.

June 2017: E190-200LR (0558, OE-LWP), ex-(D-AEBR), Lufthansa (DLH) leased.

October 2017: Austrian Airlines (AUL) launched its latest long-haul route from Vienna (VIE) on October 25, a weekly (Wednesdays) 6,978 km link to Mahé (SEZ) in the Seychelles. “Direct flights from Europe are very important for our tourism industry,” informed Ambassador Maurice Lousteau-Lalanne, Minister for Tourism, Civil Aviation, Ports & Marine, Seychelles. “It will fill an important gap, especially with the high-end tourism which we market for Seychelles. The arrival of (AUL) is very promising for Seychelles, in terms of exchanges between our 2 countries, in trade and most importantly our tourism industry,” Lousteau-Lalanne added.

Facing no direct competition, (AUL) will operate its fleet of 767-300s on the service. As a result of this launch, it means that (AUL) now serves 10 scheduled destinations in Africa and Asia from Vienna this winter, with Mahé joining Bangkok Suvarnabhumi, Beijing, Cairo, Colombo, Hong Kong, Malé, Marrakech, Mauritius, and Shanghai Pudong.

February 2018: See attached photo of Salzburg Airport, Austria in the summer, which is surrounded by mountains in the south and local community north of the airfield. The airport's runway has a length of 2,850 m/9,350 ft.

March 2018: News Item A-1: "Austrian Airlines (AUL) Boosts 2017 Results on Increased European demand."

Lufthansa (DLH) subsidiary Austrian Airlines (AUL) has reported a 2017 adjusted (EBIT) of €94 million/$112.6 million, up +62% from +€58 million in 2016. Earnings before interest and taxes (EBIT) rose +55% to €101 million.

(AUL), the Star (SAL) Alliance member cited an increasing demand for European flights (mainly because of the bankruptcy of airberlin (BER) and its Austrian subsidiary NIKI (NKI)) for the positive results.

Outgoing (CFO) Heinz Lachinger said the figures represent the “best results in our 60-year history, even if we still have a long way to go with respect to upcoming investments.”

Full-year revenue increased +9.5% to €2.4 billion, complemented by an income of +€7 million from sales of the Fokker F 70/F 100 fleet to Alliance Airlines in Australia.

Despite a +7% increase in the number of employees (mainly related to the hiring of pilots (FC) and flight attendants (CA)) operating expenditures grew only +6% to €2.4 billion. Capacity rose +7% to 26 billion (ASK)s, as (AUL) concluded the integration of 17 Embraer aircraft to replace the Fokker F 70/F 100s. Passenger numbers increased +13% to 12.9 million. Traffic was up +7.6% to 20 billion (RPK)s, resulting in a full-year load factor of 76.1% LF.

As of December 31, 2017, (AUL) operated 83 aircraft and flew a total of 143,999 flights.

Looking ahead, (AUL) expects a challenging year in 2018 because of the predicted rise in jet fuel prices and ongoing investments in aircraft, product improvements and increased (LCC) competition, especially in Vienna. “We are strongly investing in our product offering and expanding the fleet in 2018,” (CEO) Kay Kratky said. “Combined with a tougher competitive environment, once again at the present time, we anticipate an adjusted (EBIT) slightly below the comparable level of 2017.” On March 5, (AUL) canceled >140 out of 570 flights March 6 to 7 as collective bargaining meetings interrupted flight operations, affecting 10,000 passengers.

“Austrian (AUL) is the weakest member of the Lufthansa Group in terms of margin and earnings,” Lufthansa Group Chairman & (CEO) Carsten Spohr said at the (DLH) results press conference in Frankfurt. Actions like this [flight cancellations] are not helpful. (AUL) actually has to make the most money, because they need new long-haul aircraft.” Spohr said (AUL) must further reduce costs in all areas, especially in negotiations with unions, airport costs and taxes.

This year, 1 additional Boeing 777-200ER will join the (AUL) fleet. (AUL) will relaunch services to Japan’s Tokyo Narita and South Africa’s Cape Town in 2018.

News Item A-2: Lufthansa Group subsidiary Austrian Airlines (AUL) will fly 18x-weekly Vienna to Tel Aviv services from March 25, up +4 additional frequencies per week compared to the prior-year period.

In the winter 2018/2019 flight schedule, (AUL), the Star (SAL) Alliance member will further increase capacity to 21x-weekly services to Tel Aviv, doubling the number of flights compared to the 2017/2018 winter flight schedule.

(CCO) Andreas Otto said, “Tel Aviv is an important destination for us, not only as a direct flight connection, but also for transfer traffic. This additional capacity will also strengthen our long-haul flight connections, for example to the USA,” he said.

(AUL) operates Airbus A320 family aircraft on the Tel Aviv route.

News Item A-3: Lufthansa (DLH) subsidiary Austrian Airlines (AUL) has canceled >140 out of 570 flights March 6 to 7 as collective bargaining meetings are expected to interrupt flight operations, affecting 10,000 passengers.

As a precautionary measure, (AUL) said it has adjusted operations and thinned out schedules by -25% during this period on flights between Vienna and Amsterdam, Basel, Brussels, Budapest, Bucharest, Dusseldorf, Yerevan, Frankfurt, Geneva, Hamburg, Cologne, Copenhagen, Leipzig, Lyon, Milan, Moscow, Munich, Prague, Salzburg, Sofia, Stockholm, Stuttgart, Tehran, Venice, Zagreb and Zurich.

(AUL) has 3,900 cockpit and crew members.

Trade union Vida called management’s offer of a 2.1% inflation compensation and one-time payment of 1.4% “unacceptable.” Vida said also strikes cannot be ruled out. (AUL)’s management said it considered the 2-day work meeting to be “completely disproportionate,” adding, a labor dispute during ongoing negotiations was the wrong answer to more jobs, more career and more money.

Lufthansa Group Chairman & (CEO) Carsten Spohr said these types of flight cancellations could reduce (AUL)’s chances of further expanding Vienna as a hub, affecting employees. “(AUL) is the weakest member of the Lufthansa Group in terms of margin and earnings.” (AUL) actually has to make the most money, because they need new long-haul airplanes.” Spohr said (AUL) must further reduce costs in all areas, especially in negotiations with unions, airport costs and taxes.

April 2018: News Item A-1: "Austrian Airlines Unveils New Livery"
by (ATW) Kurt Hofmann (, April 20, 2018.

Lufthansa (DLH) subsidiary Austrian Airlines (AUL) will reveal a new branding May 15 when it rolls out its 6th Boeing 777-200ER in recognition of (AUL)’s 60th anniversary.

Austrian (AUL) began operations on March 31, 1958.

The 1st 777 to feature the new livery is currently in Hong Kong, where it is being modified and adapted to Austrian standards; it should arrive in Vienna in May. The former Aeromexico (AMX) airplane is on lease from Irish lessor AerCap (DEA).

The new livery will be gradually introduced as each airplane needs repainting (which will take about 7 years). When the 2019 summer flight schedule takes effect, around 18 out of 82 airplanes are expected to feature the new branding.

Features of the new livery include an optically enlarged empennage and visually highlighted chevron and wordmark. The typical Austrian salutation “Servus” will remain on the airplane belly.

Accordingly, all customer touch points and airport signage will be adapted.

On February 8, Lufthansa (DLH) unveiled its new livery in Frankfurt and Munich.

News Item A-2: The Lufthansa Group has selected Alexis von Hoensbroech for (CEO) of subsidiary Austrian Airlines (AUL) as of August 1, succeeding Kay Kratky, who will step down after 3 years in July when his contract ends. The appointment is subject to supervisory board approval.

Von Hoensbroech is currently Lufthansa Cargo (LUB) (CCO) and executive board member.

(AUL) Board Chairman Harry Hohmeister said, “Alexis has the perfect know-how to lead Austrian (AUL) in the next phase and establish it as a profitable premium carrier in the highly competitive Austrian market.”

He joined Lufthansa Passage in 2005, where he was responsible for its Strategy & Subsidiaries division. In 2009, he was named Project Manager for Airline Integration Management.

From 2010 to 2014, von Hoensbroech was appointed as Head of Commercial Frankfurt, where he worked closely with Kratky, who at that time served on the management board of Lufthansa Passage. Since 2014, von Hoensbroech has been (CCO) and Lufthansa Cargo (LUB) executive board member.

Upon supervisory board approval, from August 1 Austrian (AUL)’s management board team will comprise Alexis von Hoensbroech as (CEO), Andreas Otto as (CCO) (also a former Lufthansa Cargo (LUB) (CCO)) and Wolfgang Jani as (CFO).

(AUL) reported a 2017 adjusted (EBIT) of €94 million/$112.6 million, up +62% from €58 million in 2016. Earnings before interest and taxes (EBIT) rose +55% to €101 million.

However, this year (AUL) is strongly investing in product offerings and fleet expansion. Combined with a tougher competitive environment, (AUL) anticipates an adjusted (EBIT) “slightly below the comparable level of 2017.”

July 2018: "Austrian Airlines Adjusts Long-haul Network, Cuts 5 Destinations" by (ATW) Kurt Hofmann (, July 6, 2018.

Lufthansa (DLH) subsidiary Austrian Airlines (AUL) plans to alter its long-haul network and eliminate loss-making routes from Vienna to Hong Kong, Havana (Cuba) and Colombo (Sri Lanka) at the end of October.

Other changes include:

* Terminating flights to Isfahan and Shiraz (Iran) from mid-September;
* Changing Vienna to Miami (Florida) service to seasonal and ceasing at the end of October to reopen in summer 2019;
* Cutting Vienna to Linz domestic route from October 27.
* Launching 2x-weekly seasonal Vienna to Cape Town (South Africa) services from October 27.

“With the entire fleet of 12 long-haul airplanes (6 Boeing 767-300ERs and 6 777-200ERs), we want to offer a denser route network,” (CCO) Andreas Otto said.

For the coming winter schedule, (AUL) will offer a total of up to 29x-weekly flights to North America and 19x-weekly services to Asia.

The additional capacity will be used to increase frequencies on existing routes, especially to Chicago O’Hare; Newark, New Jersey; New York (JFK); Toronto, Canada; and China’s Beijing and Shanghai Pudong.

(AUL) is targeting the business and transfer passenger market in Eastern Europe, which (LOT) Polish Airlines is also adding capacity and new routes.

Lufthansa (DLH) member of the executive board & Chief Officer Hub Management Harry Hohmeister said recently that in recent years (AUL) has repeatedly changed and tried many things. “Significant progress was made under the leadership of Andreas Otto. Some long-distance routes must be more profitable. It is also clear that no product portfolio in the world will last forever. We constantly look at the flight schedules very carefully and develop it further. Therefore, it is quite normal that it is here there are adjustments,” he said.

October 2018: News Item A-1: Austrian Airlines (AUL) and Air Canada (ACN) have both announced 1 new route which will be operated as a code share between the 2 airlines. “We are pleased to launch new non-stop flights from Toronto to Vienna on board our state-of-the-art Boeing 787 Dreamliner, further expanding (ACN)’s reach in Europe,” said Lucie Guillemette, Executive VP & Chief Commercial Officer (CCO) at (ACN).

On the other side of the Atlantic, (AUL) (CCO) Andreas Otto announced, “We succeeded in attracting a strong partner in (ACN) to Vienna. In this way, we can feature an additional destination in our Canadian offering adding Montreal and also strengthen our continental transfer traffic at the same time.”

(ACN) will begin year-round non-stop service between Toronto and Vienna on April 29 2019 on board a Boeing 787-9 Dreamliner. (ACN) is taking over (AUL)’s existing flights between Toronto and Vienna. The route will be bookable on (AUL)’s website. These flights will operate daily in the summer and 5x-weekly during the winter season.

Accordingly, (ACN), which is Canada’s largest airline, will operate the same number of flights on the Vienna TO Toronto route and feature departure and arrival times comparable to (AUL) up until now.

In addition to (ACN)’s service, Austrian Airlines (AUL) will begin new year-round non-stop service between Toronto and Vienna on April 29 2019 on board a Boeing 767-300ER. These flights will operate daily in the summer and winter season.

News Item A-2: Austrian Court Rejects Complaints Against Vienna Airport’s 3rd Runway" by Kurt Hofmann (, October 17, 2018.

Austria’s Constitutional Court has dismissed citizen complaints against Vienna Airport’s 3rd runway and has referred further action to the Administrative Court. In March 2018, the Federal Administrative Court gave the go-ahead for runway construction.

For Vienna airport, the complaint rejection is a partial success in the 11-year ongoing approval process. The airport has been considering a 3rd runway since early 1999. Vienna airport is Austrian Airlines (AUL)’s main hub, a Star (SAL) Alliance member and part of the Lufthansa Group’s multi-hub strategy, which includes Zurich Airport (Switzerland), as well as Frankfurt and Munich (Germany).

News Item A-3: Aircraft Maintenance & Engineering Company (AMECO) (BEJ) has Austrian Airlines (AUL) contract to provide Boeing 777 heavy maintenance through 2020.

November 2018: The new (CEO) of Austrian Airlines (AUL) said (AUL) needs more financial strength before it can make needed investments in fleet renewal. “We need to be able to invest. (AUL) has not reached that capability yet,” said (CEO) Alexis von Hoensbroech, who became (CEO) on August 1. (AUL), the Lufthansa (DLH) subsidiary reported an adjusted (EBIT) of €86 million ($99.8 million) for the 1st 9 months of 2018, a -14% year-over-year decline.


Click below for photos:
AUL-767-3Z9ER Vienna 2018-04.jpg
AUL-777-200ER - 2016-04.jpg
AUL-A319-112 OE-LDA Sofia 2016-11.jpg
AUL-A321-100 - 2015-08.jpg
AUL-F 100 - 2013-10
AUL-F 70 - 2014-06

November 2018:

6 737-330 (25215, N215AU; 25216, N216AU; 25217, N217AU; 25242, N541AU;
25414, N541AU; 26428, N642AU), EX-(D-ABED; D-ABEE; D-ABEF; D-ABEH; D-ABEK; D-ABEN; 2016-12.

0 737-600 (CFM56-7B), LEASED 2007-03, RETURNED.

0 737-6Z9 (CFM56-7B) (30137, OE-LNL "KAHLENBERG;" 30138, OE-LNM "Schneeberg" 2010-09), BOTH WFU 2012-05 TO BE SCRAPPED.

0 737-7Z9 (CFM56-7B) (30418, OE-LNN "DACHSTEIN;" 30419, OE-LNO "HOCHSCHWAB"). 2 PHASED OUT 2012-05.

7 737-8Z9 (CFM56-7B27) (69-28177, /98 OE-LNJ "FALCO;" 222-28178, /99 OE-LNK "FREDDY MERCURY; 1100-30420*, /02 OE-LNP "GROSSGLOCKNER;" 1345-30421*, OE-LNQ "GREGORY PECK," 2003-07; 1680-33833, /05 OE-LNR "PIZ BUIN;" 1938-33834*, OE-LNT, 2006-05; 1720-34262*, /05 OE-LNS "MILES DAVIS"). *WITH WINGLETS. ALL WET-LST (LAL). 7 AIRPLANES TO BE REPLACED BY A320'S AND LEAVE BY 2013-03. 184Y.

6 767-3Z9ER (PW4060) (165-23765, /88 OE-LAU; 448-26417, /92 OE-LAW "CHINA;" 467-27095, /92 OE-LAX; 731-29867, /98 OE-LAY "JAPAN;" 759-30331, /99 OE-LAZ "INDIA;" 812-30383, /00 OE-LAE "MALAYSIA" - - SEE PHOTO - - "AUL-767-WINGLETS-2009-04"), 2 LEASED TO (LDI) 1999-11; 23765 RETURNED FROM (RNA); 29867, OE-LAY; RETURNED FROM (SPP) 2002-01. 3 SOLD TO (CDF) 2003-02. (SIA) MAINTENANCE. (27095, OE-LAX "SALZBURGER FESTSPIELE") RETURNED FROM (LDI) 2003-10. 29867, OE-LAY; 30331, OE-LAZ; RETURNED FROM (DLH)/(CDF) 2004-01. 26417 RETURNED 2004-08. (ETOPS). BEING RETROFITTED WITH WINGLETS. 36C, 189Y.

0 767-330ER (377-25137), (ILF) LEASED 2003-09. RETURNED.

1 777-2Q8ER (GE90-92B) (27607, OE-LPE "BLUE DANUBE"), DELIVERED TO TYROLEAN AIRLINES (2014-03), (ILF) LEASED. 49C, 258Y.

1 777-2Q8ER (GE90-92B) (28692, OE-LPF), 2018-05. EX-AEROMEXICO (AMX), MAINTENANCE IN HONG KONG. 49C, 258Y.

5 777-2Z9ER (GE90-92B) (87-28698, /97 OE-LPA "PABLO PICASSO;" 163-28699, /98 OE-LPB "ERNEST HEMINGWAY;" 386-29313, /02 OE-LPC "DON BRADMAN;" 607-35960, OE-LPD "AMERICA," 2007-01), (GEF) LEASED. TRANSFERRED FROM (LAL) TO (AUL) 2005-09. 49C, 258Y.

0 MD-81 (JT8D-17) (2 SOLD TO (SFA) 1997-12), 5 SOLD TO (SPR) (48015; 48017; 48021; DELIVERED, 49115; 49164; IN 4TH QUARTER 2000) ALL 5 SOLD TO (SPR). 141Y.

0 MD-82 (JT8D-217) (3 SOLD TO (SFA) 1997-05), LEASED TO (ALB).

0 MD-82 (JT8D-217C) (1183-49278, /85 OE-LMA "LINZ;" 1230-49279, /85 OE-LMB "EISENSTADT;" 1252-49372, /86 OE-LMC "BADEN"), (TBC) LEASED, 49279; 49372; RETURNED 2004-01. 161Y.

0 MD-83 (JT8D-219) (1837-49933, /91 OE-LMD "VILLACH;" 2057-53377, /93 OE-LME "KREMS"), ALL MD-80 HEAVY MAINTENANCE BY SHANNON AEROSPACE. 49933; 53377; SOLD TO AIRCRAFT & ENGINE SUPPORT 2005-10. 161Y.

0 MD-87ER (JT8D-219) (1412-49411, /87 OE-LMK "ST POLTEN;" 1424-49412, "STADT SALZBURG"), 49412 WET-LEASED TO (SNL) 2001-07, RETURNED. 49412 SOLD TO AIRCRAFT ENGINE & SUPPORT 2005-04. 111Y.

0 MD-87SR (JT8D-217C) (1681-49413, /90 OE-LMM "INNSBRUCK;" 1682-49414, /90 OE-LMN "KLAGENFURT;" 1692-49888, /90 OE-LMO "BREGENZ"). 49413 SOLD TO (PSS) 2001-07. 49888; SOLD TO AIRCRAFT ENGINE & SUPPORT 2005-04. (49888; FOR SALE BY GENESIS CUSTOM JETLINERS, TEL: (630) 466-1700, AIRPLANE LOCATED AT SUGAR GROVE, ILLINOIS, USA). 111Y.

0 A310-324 (PW4152) (489, /88 OE-LAA "NEW YORK;" 492, /89 OE-LAB "TOKYO"), 624 LEASED TO (APZ) 1999-12, 568 RETURNED (AFIS) 2000-03, 3 RETURNED.

8 A319-112 (CFM56-5B6/2P) (2131, OE-LDA "SOFIA" 2004-03 SEE PHOTO; 2174, OE-LDB "BUCHAREST" 2004-03; 2262, OE-LDC, 2004-07; 2416, /05 OE-LDD "MOSCOW;" 2494, OE-LDE, 2005-06; 2547, OE-LDF, 2005-08; 2652, OE-LDG, 2006-01). 138Y.

1 A319ACJ-115 (3513, OE-LOV), EX-(D-ALEY), 2013-06. CORPORATE JET.

12 A320-214 (CFM56-5B4/2) (768, /98 OE-LBN "OSTTIROL;" 776, /98 OE-LBO "PYHRN-EISENWURZEN;" 797, /98 OE-LBP "NEUSIEDLERSEE;" 1137, /99 OE-LBQ "WIENERWALD;" 1150, /99 OE-LBR "BREGENZER WALD;" 1189, /00 OE-LBS "WALDVIERTEL;" 1387, /01 OE-LBT "WORTHERSEE;" 1478, /01 OE-LBU "MUHLVIERTEL;" 1678, OE-LBW "INNVIERTEL;" 1735, OE-LBX; 1931, OE-LBK; 1937, OE-LBI). 150Y.

2 A320-214 (5122, OE-LBY; 5181, OE-LBZ), EX-(D-AIZK & D-AIZL) 2016-10. 150Y.

3 A321-111 (CFM56-5B1) (552, /95 OE-LBA "SALZKAMMERGUT;" 570, /96 OE-LBB "PINZGAU;" 581, /96 OE-LBC "SUDTIROL"), 186Y.

3 A321-211 (CFM56-5B3/2P) (920, /98 OE-LBD "STEIRISCHES WEINLAND;" 935, /98 OE-LBE "WACHAU;" 1458, /01 OE-LBF "WIEN"). 186Y.

0 A330-223 (PW4168A) (223, /98 OE-LAM "DACHSTEIN;" 195, /97 OE-LAN "ARLBERG;" 181, /97 OE-LAO "GROSSGLOCKNER;" 317, /99 OE-LAP "SEMMERING"). ALL 4 SOLD BY END OF 2007-04. 3 WILL GO TO (TAP). 24C, 235Y.


0 A340-211 (CFM56-5C2G) (075, /95 OE-LAG "EUROPE;" 081, /95 OE-LAH "ASIA"), 081 WET-LEASED TO (PBJ) 2001-09. 2 LEASED TO (DLH) UNTIL 2003-03. 075; 081; SOLD TO INGEPAR 2005-09, TO BE LEASED TO (FAF) 2006-06. 30C, 227Y.

0 A340-313X (CFM56-5C4) (169, /97 OE-LAK "AFRICA;" 263, /99 OE-LAL "AMERICA"), GROUNDED 2002-01, & FOR SALE OR LEASE. TO LEAVE FLEET BY END OF 2007-04. 169; LEASED TO (CSR) 2007-11 AS (HB-JMK). 30C, 261Y.

1 BOMBARDIER DASH 8-Q315 (546, HB-LIE, 2007-12), LEASED.

1 CRJ200 (7365, OE-LCN), EX-STORAGE 2012-10.

3 EMBRAER ERJ-145, LSD 2007-03.


2 EMBRAER E190-200LR (0423, OE-LWE, 0447, OE-LWF 2018-06), 0423 EX-(D-AEBG) FERRIED MUNICH TO BRATISLAVA FOR PAINTING 2017-03.

5 EMBRAER E190-200LR (0486 OE-LWH; 0507, OE-LWJ; 0532, OE-LWL; 0555, OE-LWO; 0565, OE-LWQ), 180Y.

1 EMBRAER E190-200LR (0558, OE-LWP), EX-(D-AEBR), LUFTHANSA (DLH)) LEASED 2017-05. 180Y.

1 +16 ORDERS E195 (0411, OE-LWD, 2015-08), 120Y.

9 F 70 (TAY 620-15) (11559, /95 OE-LFO "WIENER NEUSTADT;" 11560, /95 OE-LFP "WEIS;" 11568, /96 OE-LFQ "DORNBIRN;" 11572, /96 OE-LFR "STEYR;" 11528, /95 OE-LFS "SCHWECHAT;" 11537, /95 OE-LFT "TULIN"), 11528; 11537; RETURNED 2002-09; 11559 OPERATED BY TYROLEAN W/O AT MUNICH 2004-01. ALL BEING REPLACED BY E195'S STARTING IN 2016. SOLD TO ALLIANCE AIRLINES AUSTRALIA. 75Y.


1 AN-12, (UKR) WET-LEASED 2003-11.


Click below for photos:
AUL-1-Alexis von Hoensbroech 2018-08 L jpg
AUL-1-Alexis von Hoensbroech 2018-08.jpg
AUL-1-KAY KRATKY - 2015-08.jpg
AUL-1-Kay Kratky-R-2015-05.jpg
AUL-3-ALFRED OTSCH - 2008-11


Alexis has been the Lufthansa Cargo (LUB) Chief Commercial Officer (CCO) and executive board member. He joined Lufthansa Passage in 2005, where he was responsible for its Strategy & Subsidiaries division. In 2009, he was named Project Manager for Airline Integration Management. From 2010 to 2014, Alexis was appointed as Head of Commercial Frankfurt, where he worked closely with Kay Kratky, who at that time served on the management board of Lufthansa Passage. Since 2014, Alexis has been (CCO) and Lufthansa Cargo (LUB) executive board member.

Kay has been a member of the Lufthansa German Airlines board since 2011. As (COO), he has been responsible for Flight Operations and the Frankfurt hub with about 20,000 employees.

He began his professional career at Lufthansa (DLH) in 1979 by training to be a pilot (FC). He became Training Captain and Fleet Commander on the Boeing 747 and became Head Operations Control at Lufthansa Cargo (LUB) in 2001 as well an MD-11 Captain.

In 2008, Kay was appointed as Managing Director of Jade Cargo International (JDC), Shenzhen, China.






Andreas became Chief Commercial Officer (CCO) of Austrian Airlines (AUL) on October 1st, 2014. (AUL) expanded its services into North America and added a USA Customs & Border Protection (CBP) pre-clearance facility to its base at Vienna International Airport.

Andreas followed the resignation of (AUL) (CCO), Karsten Benz, to take over the newly created position of (DLH) Group Infrastructure Officer. Karsten had been (CCO) since April 2012. In this new function, based in Frankfurt, Andreas merged the infrastructure divisions of Lufthansa Passage and the Group. Andreas had been responsible for Lufthansa Cargo (LUB)'s product and global network.

Andreas was born in Mettmann on October 9th, 1962. In 1991, he obtained a degree in Business Administration. 3 years later, he was awarded a doctorate in Political Sciences. In the same year, Andreas joined Rhenus (AG & Co KG) in Dortmund as Project Manager Logistics. In 1996 he was appointed Managing Director of Rhenus Office Systems GmbH, and 2 years later was promoted to the position of Senior VP Sales at Rhenus AG. In 1999, he joined the Executive Board of Rhenus AG with responsibility for Marketing & Sales. The Supervisory Board of Lufthansa Cargo AG (LUB) appointed Andreas to the Executive Board of Lufthansa Cargo (LUB) with effect from April 1st 2000. His contract was extended on August 31st 2007 for another 5 years. Andreas is a member of the Supervisory Board of (RWE) Rhein-Ruhr AG, the Internet company AxIT AG, as well as of TRAXON GmbH, Jade Cargo International (JDC) and LifeConEx.

Andreas is married and has one son.




After his resignation, Karsten took over the newly created position of Lufthansa Group Infrastructure Officer. In this new function, based in Frankfurt, Karsten merged the infrastructure divisions of Lufthansa (DLH) Passage and the (DLH) Group.






































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