This seems to be a particularly good time for Austrian (OS), despite intense competition on the European market.

- In Feb 2018, OS transported 16.2% more passengers than in Feb 2017, driven mostly by European traffic. Utilization was 71.1%, up by 3% year-on-year.
- In mid-2018, OS is re-launching NRT (summer) and later launching CPT (winter), both on an added 777 (expected in May 2018).
- OS is also rolling out Premium Economy on all its long-haul aircraft (seats by ZIM with a 38-inch legroom)
- OS is also deciding on the replacement of its 767-300ER and 777-200ER (previously discussed: viewtopic.php?t=1375727). Long-haul destinations served today include Chicago, New York, Newark, Washington D.C., Miami, Los Angeles, Toronto, Havana, Mauritius, Seychelles, Maldives, Colombo, Bangkok, Beijing, Shanghai and Hong Kong.
- The airline is looking to hire 600 new employees in 2018 alone, after hiring 464 additional staff in 2017. At the end of 2017, it had 6,914 staff, so this is nearly a 10% increase. The new staff should include about 200 pilots, 300 flight attendants and 100 technicians (about 25% of these to serve the new 777).

Any thoughts on the room for additional room for growth? More European or long-haul routes? Even better hard product? Increased utilization?

Sources:
https://www.austrianairlines.ag/Press/P ... sc_lang=en
https://www.austrianairlines.ag/Press/P ... sc_lang=en
https://www.austrianairlines.ag/Press/P ... sc_lang=en

JakubH wrote:

Long-haul destinations served today include Chicago, New York, Newark, Washington D.C., Miami, Los Angeles, Toronto, Havana, Mauritius, Seychelles, Maldives, Colombo, Bangkok, Beijing, Shanghai and Hong Kong. [...]


Any thoughts on the room for additional room for growth? More European or long-haul routes? Even better hard product? Increased utilization?

You haven't mentioned these, however this summer they are restarting Tokyo 5x weekly and next winter they'll add CPT 2x weekly.

SpaceshipDC10 wrote:

You haven't mentioned these, however this summer they are restarting Tokyo 5x weekly and next winter they'll add CPT 2x weekly.

I did! Thanks though!

JakubH wrote:

- In mid-2018, OS is re-launching NRT (summer) and later launching CPT (winter), both on an added 777 (expected in May 2018).

My bad, sorry.

I would love to see them add additional East Coast US service. They offer a great product.

We still have to see how they perform once Wizz Air's base becomes operational.

Also, on 05.03 and 06.03 the airline cancelled 140 flights due to the negotiations with their unions not going anywhere. Seems like a strike could happen anytime soon.

JakubH wrote:

This seems to be a particularly good time for Austrian (OS), despite intense competition on the European market.

I think last week wasn't so good with lots of cancled flights and also the intention annouced by wizz to open a base. Then Niki decided to found a new airline again. So yes currently and finally things seem to be approving but remember OS had some difficult time in the last years and it doesn't seem they have clear sailing. They need to keep growth and capicity increase sustainable.

Openings, think more about increase of frequency CTP only twice per weeks seems like a careful opening move

It would be great if they added Boston, San Francisco or Mumbai to their route network

I think these numbers are just so good, because of the bankruptcy of Air Berlin and NIKI.

But AUA is lucky that IAG (Vueling) didn't get the planes and slots of AB ... NikiMotion (Niki Lauda) is not such a competition as IAG. Just WIZZ might add some pressure at their hub in VIE.

I really hope the employees and management get their act together, as it is generally an airline I like to fly.

eisenbach wrote:

I think these numbers are just so good, because of the bankruptcy of Air Berlin and NIKI.

But AUA is lucky that IAG (Vueling) didn't get the planes and slots of AB ... NikiMotion (Niki Lauda) is not such a competition as IAG. Just WIZZ might add some pressure at their hub in VIE.

I really hope the employees and management get their act together, as it is generally an airline I like to fly.

This is more than just Niki, OS has been improving for the past couple of years overall.

Well, Ryanair is considering launching flights out of Vienna. If this really happens then I wonder what the future holds for Austrian Airlines.

https://www.ch-aviation.com/portal/news ... vienna-ops

Blerg wrote:

Well, Ryanair is considering launching flights out of Vienna. If this really happens then I wonder what the future holds for Austrian Airlines.
https://www.ch-aviation.com/portal/news ... vienna-ops

Sure, there's a gap on the low-cost side of the spectrum, but I am not sure how/if this will threaten OS's position among businessmen, diplomats etc.

As for market segmentation, I am not sure how big the overlap for Austrian and Ryanair is. Anecdotally, OS's premium fares on the LAX route are among the highest for European airlines, making me think they are successful in filling their premium cabins (perhaps thanks to a great hard product and a low-hassle connectivity at VIE).

RainerBoeing777 wrote:

It would be great if they added Boston, San Francisco or Mumbai to their route network

Agreed - all three seem to have solid potential, and could prove to be worthy competitors to other congested European airports.

JakubH wrote:

Blerg wrote:

Well, Ryanair is considering launching flights out of Vienna. If this really happens then I wonder what the future holds for Austrian Airlines.
https://www.ch-aviation.com/portal/news ... vienna-ops

Sure, there's a gap on the low-cost side of the spectrum, but I am not sure how/if this will threaten OS's position among businessmen, diplomats etc.

As for market segmentation, I am not sure how big the overlap for Austrian and Ryanair is. Anecdotally, OS's premium fares on the LAX route are among the highest for European airlines, making me think they are successful in filling their premium cabins (perhaps thanks to a great hard product and a low-hassle connectivity at VIE).

Well, Austrian Airlines might keep its business clientele but is it enough to maintain all those European flights on the A319s and A320s? Also, the fact Ryanair is thinking of Vienna only goes to show that Bratislava lost most, if not all, of its importance once Wizz Air launched Vienna. Really goes to show how they outsmarted them this time around. Will be interesting to see how all of this plays out and what if any role Eurowings will play. I guess we will have to wait for the first Wizz Air flight to take off.

Would be interesting to know if OS has actually undertaken any moves to fight Wizz Air.

Blerg wrote:

Well, Austrian Airlines might keep its business clientele but is it enough to maintain all those European flights on the A319s and A320s? Also, the fact Ryanair is thinking of Vienna only goes to show that Bratislava lost most, if not all, of its importance once Wizz Air launched Vienna. Really goes to show how they outsmarted them this time around. Will be interesting to see how all of this plays out and what if any role Eurowings will play. I guess we will have to wait for the first Wizz Air flight to take off.

Would be interesting to know if OS has actually undertaken any moves to fight Wizz Air.

I wouldn't be surprised if we see Eurowings take on some more OS flying or challenging Wizz on some of the new routes. Also OS cost base is not too high to begin with.

JakubH wrote:

As for market segmentation, I am not sure how big the overlap for Austrian and Ryanair is. Anecdotally, OS's premium fares on the LAX route are among the highest for European airlines, making me think they are successful in filling their premium cabins (perhaps thanks to a great hard product and a low-hassle connectivity at VIE).

A little off topic but just wondering, was LAX launched as seasonal or did it just not come back for winter?

How is the MIA route doing?

NYCVIE wrote:

Blerg wrote:

I wouldn't be surprised if we see Eurowings take on some more OS flying or challenging Wizz on some of the new routes. Also OS cost base is not too high to begin with.

Maybe it's not that high compared LH or LX but I assume it's considerably higher when compared to W6 or FR who will become its main competitors. All in all, I think Austrian Airlines will survive this first 'attack' by Wizz Air. However, they must know that they won't stop expanding meaning that sooner or later they will challenge them in bigger and more lucrative markets. Who knows, maybe next year they introduce flights to Frankfurt from Vienna so as to destroy the LH Group monopoly.

Blerg wrote:

Well, Austrian Airlines might keep its business clientele but is it enough to maintain all those European flights on the A319s and A320s? Also, the fact Ryanair is thinking of Vienna only goes to show that Bratislava lost most, if not all, of its importance once Wizz Air launched Vienna. Really goes to show how they outsmarted them this time around. Will be interesting to see how all of this plays out and what if any role Eurowings will play. I guess we will have to wait for the first Wizz Air flight to take off.

With this move from Wizzair, Bratislava is indeed sentenced to (near) death. In all fairness, do the residents of the Bratislava region (and surroundings) need an international airport, with a bus connection every 30 minutes to VIE that costs only 5 EUR? I would rather invest in improving the connection to the airport, e.g., a railway link, like the CAT4, to connect BTS to VIE in 15/20 minutes.

Regarding this topic, having used Austrian a lot in the past years, I don't think they'll suffer a lot from Wizzair's entrance in VIE. They have a very good product, with the exception of a couple of planes they got from airBerlin. I was "lucky" to travel LHR-VIE twice on those planes and twice I officially complained to the company that it is not the type of cabin that they advertise and specially not the kind of cabin to assign to one of their most premium routes. No legroom whatsoever, very uncomfortable and some people with a slightly bigger stomach couldn't even open the tray table. Also couldn't open a laptop because there wasn't enough space.

In my complaint I begged them to get rid of those planes or to retrofit their cabins. Their response was that the airplane is safe and compliant with all safety regulations applicable in Europe.

Does Austrian have an independent strategy? It seems like we are running it!

flyingqueen wrote:

Does Austrian have an independent strategy? It seems like we are running it!

I think Austrian Airlines' overall strategy has remained unchanged once Lufthansa took over. They always aspired to be a major player in eastern Europe which makes sense given Austria's economic ties with this region. That said, as long as it works, I doubt Lufthansa interferes much.

By the way, I read somewhere a while back that LX tried to expand in ex-Yugoslavia which was always Austrian's turf but their failure was of epic proportions.

Blerg wrote:

flyingqueen wrote:

Does Austrian have an independent strategy? It seems like we are running it!

I think Austrian Airlines' overall strategy has remained unchanged once Lufthansa took over. They always aspired to be a major player in eastern Europe which makes sense given Austria's economic ties with this region. That said, as long as it works, I doubt Lufthansa interferes much.

By the way, I read somewhere a while back that LX tried to expand in ex-Yugoslavia which was always Austrian's turf but their failure was of epic proportions.

lol I would love to read that piece! Any chance you remember what it was/where its from?

NYCVIE wrote:

Blerg wrote:

flyingqueen wrote:

Does Austrian have an independent strategy? It seems like we are running it!

I think Austrian Airlines' overall strategy has remained unchanged once Lufthansa took over. They always aspired to be a major player in eastern Europe which makes sense given Austria's economic ties with this region. That said, as long as it works, I doubt Lufthansa interferes much.

By the way, I read somewhere a while back that LX tried to expand in ex-Yugoslavia which was always Austrian's turf but their failure was of epic proportions.

lol I would love to read that piece! Any chance you remember what it was/where its from?

I can't remember now as it was some two years ago. It was basically how LX launched a major ex-YU expansion and in the end those services were either cut or turned into seasonal operations.

Seems like they only fly to Serbia (BEG and INI) year-round while SKP is operated by Edelweiss. Cities such as ZAG, SJJ and LJU are seasonal while BNX and TGD were suspended before they were even launched. Swiss is extremely weak in the region despite all the demand.

Seems pretty odd to me with so many people from the former Yugoslavian countries that now live in Switzerland. We are talking big numbers. Are they driving back home? Or take the train or something?

P1aneMad wrote:

Seems pretty odd to me with so many people from the former Yugoslavian countries that now live in Switzerland. We are talking big numbers. Are they driving back home? Or take the train or something?

The market is huge but there is a lot of competition from airlines like easyJet, Air Serbia, Adria, Croatia Airlines and Wizz Air. LX does manage to operate LJU and ZAG seasonally though. They are increasing BEG to 16 and INI to 3 weekly. Swiss is not an insignificant player but they are far from being a major one.

Blerg wrote:

P1aneMad wrote:

Seems pretty odd to me with so many people from the former Yugoslavian countries that now live in Switzerland. We are talking big numbers. Are they driving back home? Or take the train or something?

The market is huge but there is a lot of competition from airlines like easyJet, Air Serbia, Adria, Croatia Airlines and Wizz Air. LX does manage to operate LJU and ZAG seasonally though. They are increasing BEG to 16 and INI to 3 weekly. Swiss is not an insignificant player but they are far from being a major one.

Coming back to OS, I'd be curious to understand how the cost base for airlines in the LH group varies and what the difference is relative to the likes of easyJet and Wizz Air. OS offers, in my experience, superior hard product and good-quality service, which I suspect allows them to get higher margins if the cost of doing business is not markedly higher than other airlines they compete with.

Also, what is the reputation OS has in key European markets? Again, I personally think of them as one of the best-in-class airlines on the continent.

Austrian's press conference addressing 2017 results and the future strategy is now public: https://www.youtube.com/watch?v=fJ8xqAtPe1U

A few highlights:
- A decision on 767 replacement is underway and should be made public in summer 2018. Fleet modernization considerations include both second-hand and new aircraft.
- Asia flights are "under market pressure" (literally, "cash cows are a little weaker")
- Miami has not yet reached a "business case" status, but CEO predicted a two-year growth run and confirmed a confirmed positive trend so far
- Training of 100 new pilots is a key priority for expansion in 2018
- In pricing and product offering, the mantra is "you get what you want, you pay what you want"

[Native German speakers: feel free to correct any inaccuracies above/add more.]

Question for the forum: given the lack of growth seen in Asia, what are other markets Austrian could become stronger in? Any chance of growing in Africa/Latin America/North America?

With Lufthansa shifting the A380 to MUC-MIA, I wonder what it means for OS' far inferior product out of VIE on the B763.
Both MUC and VIE are aspiring to become a transfer point for central and eastern Europe so I wonder if they might start competing against each other. Who knows, if MIA doesn't improve maybe OS will end up suspending it.

Maybe OS should build its future long-haul fleet around the 787 family.

I wouldn't be suprised to see OS with replacing it's long haul fleet with A350's, which will also harmonize the cockipt corps with the A32S fleet. Anyhow whatever LH will decide, should the replacement be with new aircraft, which I would assume, since not too old B777's would only be 77W's and these seem to large for the OS fleet, it will probably be the same kind of aircraft to be used to replace the A333's of LX and SN and the A333's / A343's of Edelweiss over the next 10 years +-

LXA340 wrote:

I wouldn't be suprised to see OS with replacing it's long haul fleet with A350's, which will also harmonize the cockipt corps with the A32S fleet. Anyhow whatever LH will decide, should the replacement be with new aircraft, which I would assume, since not too old B777's would only be 77W's and these seem to large for the OS fleet, it will probably be the same kind of aircraft to be used to replace the A333's of LX and SN and the A333's / A343's of Edelweiss over the next 10 years +-

A350 seems like too much of an aircraft for a smaller airline, but fleet consistency might be a bigger deal for OS than LH. The A330-800neo could be a good solution, however, for most of its needs, while the A350 could help OS become a true long-haul champion.

Some bold thinking: if it's expansion continues successfully, OS could purchase the A350 XWB ULR (which can fly up to 9,700 nautical miles or over 20 hours non-stop) and turn VIE into the European hub for the Kangaroo route. It seems to be geographically well-positioned (all key Australian cities are within 16,000 km of VIE) and Vienna could also enable the most optimal connections to other key European capitals.

Of course, OW seems to dominate the route today but what about 5-10 years from now?

FYI:
VIE-PER: 8,221 mi
VIE-SYD: 9,918 mi
VIE-MEL: 9,771 mi
VIE-BNE: 9,713 mi

LHR is 800 miles further and would involve some backtracking/airport hassle for most other Europeans traveling to Australia anyways.

JakubH wrote:

LXA340 wrote:

I wouldn't be suprised to see OS with replacing it's long haul fleet with A350's, which will also harmonize the cockipt corps with the A32S fleet. Anyhow whatever LH will decide, should the replacement be with new aircraft, which I would assume, since not too old B777's would only be 77W's and these seem to large for the OS fleet, it will probably be the same kind of aircraft to be used to replace the A333's of LX and SN and the A333's / A343's of Edelweiss over the next 10 years +-

A350 seems like too much of an aircraft for a smaller airline, but fleet consistency might be a bigger deal for OS than LH. The A330-800neo could be a good solution, however, for most of its needs, while the A350 could help OS become a true long-haul champion.

Some bold thinking: if it's expansion continues successfully, OS could purchase the A350 XWB ULR (which can fly up to 9,700 nautical miles or over 20 hours non-stop) and turn VIE into the European hub for the Kangaroo route. It seems to be geographically well-positioned (all key Australian cities are within 16,000 km of VIE) and Vienna could also enable the most optimal connections to other key European capitals.

Of course, OW seems to dominate the route today but what about 5-10 years from now?

FYI:
VIE-PER: 8,221 mi
VIE-SYD: 9,918 mi
VIE-MEL: 9,771 mi
VIE-BNE: 9,713 mi

LHR is 800 miles further and would involve some backtracking/airport hassle for most other Europeans traveling to Australia anyways.

I think that ship has long sailed. Back in the day when OS flew to Australia, it heavily relied on eastern European feed, especially from places like ex-Yugoslavia. Today the situation has drastically changed where most mid-sized airports are either linked to Dubai or Doha. On top of that, I think there are more chances of TK launching Australia than OS.

I think OS' future will depend on what happens once Wizz Air and Laudamotion take off. If Austrian Airlines fails to fight off the competition then we might see Eurowings expand more and more in VIE - something I personally hope never happens.

JakubH wrote:

A350 seems like too much of an aircraft for a smaller airline, but fleet consistency might be a bigger deal for OS than LH. The A330-800neo could be a good solution, however, for most of its needs, while the A350 could help OS become a true long-haul champion.

While I agree the A350 is WAY too much plane for OS (as would be a 77W), I also don't see them going the 338 route.
Because then THEY would be the ONLY customer for this aircraft that has been abandoned by the market.
Such aircraft become worthless, because you're stuck with them permanently.
Kind of like the A318/B736, but even worse!

I still see OS as the ideal 788/789 operator, but even that option has some drawbacks.
But we have seen Boeing willing to play ball a bit better with recent 787 deals, so maybe there's hope yet!
Otherwise, maybe they'll go (back to?) an A332/333 fleet, with late-built frames coming in second hand, like Brussels is doing, sort of.

AA737-823 wrote:

JakubH wrote:

A350 seems like too much of an aircraft for a smaller airline, but fleet consistency might be a bigger deal for OS than LH. The A330-800neo could be a good solution, however, for most of its needs, while the A350 could help OS become a true long-haul champion.

While I agree the A350 is WAY too much plane for OS (as would be a 77W), I also don't see them going the 338 route.
Because then THEY would be the ONLY customer for this aircraft that has been abandoned by the market.
Such aircraft become worthless, because you're stuck with them permanently.
Kind of like the A318/B736, but even worse!

I still see OS as the ideal 788/789 operator, but even that option has some drawbacks.
But we have seen Boeing willing to play ball a bit better with recent 787 deals, so maybe there's hope yet!
Otherwise, maybe they'll go (back to?) an A332/333 fleet, with late-built frames coming in second hand, like Brussels is doing, sort of.

A mix of 788/789 does seem like the best fit, but what about the long wait times? What are the pilot certification implications for transitioning from 777 or 767 to 787?

Does anyone know why Austrian ditched the A330? I hear that second-hand A330s are unable to operate US West Coast/SE Asia from VIE, making me think A339, B787-8/9 and A350 are really the only remaining options. Out of all these, I would put my bet on the A339, which has a shorter backlog and could have a lower cost of capital than the 787.

How big is the pressure on the Lufthansa Group to go for Airbus vs. Boeing aircraft, especially after its 777 spending spree in recent years?

Austrian Airlines has just announced additional flights over the summer.

VIE-ATH 11 > 13
VIE-TXL 34 > 55
VIE-DUS 21 > 38
VIE-STR 26 > 31
VIE-VCE 3 to 4 daily

https://www.routesonline.com/news/38/ai ... additions/

Blerg wrote:

With Lufthansa shifting the A380 to MUC-MIA, I wonder what it means for OS' far inferior product out of VIE on the B763.
Both MUC and VIE are aspiring to become a transfer point for central and eastern Europe so I wonder if they might start competing against each other. Who knows, if MIA doesn't improve maybe OS will end up suspending it.

Maybe OS should build its future long-haul fleet around the 787 family.

I don't see how OS's 763s are all that inferior to the A380. I flew VIE-MIA in Y about a year and a half ago...the cabins were all updated with the latest seats and IFE...I felt about as comfortable as I did flying Y on AF's A380.

flyguy89 wrote:

Blerg wrote:

With Lufthansa shifting the A380 to MUC-MIA, I wonder what it means for OS' far inferior product out of VIE on the B763.
Both MUC and VIE are aspiring to become a transfer point for central and eastern Europe so I wonder if they might start competing against each other. Who knows, if MIA doesn't improve maybe OS will end up suspending it.

Maybe OS should build its future long-haul fleet around the 787 family.

I don't see how OS's 763s are all that inferior to the A380. I flew VIE-MIA in Y about a year and a half ago...the cabins were all updated with the latest seats and IFE...I felt about as comfortable as I did flying Y on AF's A380.

I flew on them a few times and the 30' seat pitch in economy was atrocious. Ok, Lufthansa is not fantastic either with 31' but at least the A380 cabin is more spacious and more enjoyable.