Chief Commercial Officer, Austrian Airlines Group
Q: What is “Austrian Next Generation
strategy”? How would it help expand
your market share in Europe, or elsewhere?
A: First of all we have to create a profit
creating business unit. The money we are
going to earn cannot be earned in the inter-
European market but as a network carrier
you always have to make your money out
of long haul and mid haul flights. The long
haul flights have been in the negative for
We now have to search for the reasons
and to create the network of profit-creating
business units. The reasons, we have found
and the answers, we have identified. First
we are going to have a network redesign
starting from the winter schedule 2010-
2011. Then we will re-enter the market with
Q: How does the relationship between Austrian Airlines and Deutsche Lufthansa work in terms of creating growth?
A: Maybe you will need to ask Lufthansa
about why they have bought Austrian
Airlines. I think the major issue is the
marketing and the strategic local position
of the two countries within the CEE
(Center Eastern Europe). Countries like
Ukraine, Romania and Bulgaria are perfect.
The Austrian economy has a very strong
linkage, a better linkage even than the German
economy, to those countries, so there
is a high local demand out of Austria into
these countries, which enables us to work
as a pioneer in taking this opportunity to
develop smaller markets.
Secondly, our linkage to the Middle
East is very strong. For example Lufthansa
doesn’t fly to Syria or Damascus. There are
some destinations we are not serving of
course, for example if you look at Tel Aviv,
Lufthansa is flying a jumbo and we’re flying
But markets like Syria and Oman are
very important for us. In total we have a lot
of debts in our company. We are suffering
with red numbers, not only now but when
the economy was good as well. We have
been in the red since 2008. The reason is
because our business model got into a little
bit of trouble, and secondly we had a lot
of external factors that explain more than
three quarters of the red numbers. We had
a lot of aircraft repairs.
These for example cost hundreds of
millions each year. We started our construction
in December 2008. In 2009, we
increased it and in 2010 there will come a time when a lot of people will leave our
company and that will create a lot of layoffs.
The growth of Lufthansa gives
us other opportunities. To give you an
example, fuel management will be done
out of Germany, not only for us but for the
other subsidiary airlines like Swiss Airlines
as well – this will give us an economy of
scale so we can bargain on a bigger scale.
Of course we are taking this opportunity everywhere. Besides this, we are working on our business model in our airline, therefore we prepared a name - the Austrian Next Generation.
Q: What does it mean for the Austrian to have Deutsche Lufthansa as its controlling shareholder?
A: It’s a great opportunity for a small airline like us, otherwise you could say our airlines will never be competitive if we don’t get an economy of scale similar to the big airlines. Secondly, we get access to the customised warehouse of Lufthansa and we become a part of the agency contracts which is done for all the airlines. By joining with Lufthansa we have access, where Lufthansa used to transfer passengers to other airlines now we are also involved.
Therefore, it is much better and much more flexible. For example, people can fly to Bangkok and back to Vienna which was not possible in the past. So we offer more value to our customers. ....