Airliners.net

Lufthansa subsidiary Austrian Airlines does not have strong enough finances to renew its long-haul fleet in the near future, per Lufthansa chairman & CEO Carsten Spohr.

“Ten percent of our [Lufthansa Group] aircraft is based in Austria, but only 4% of the group’s profit is generated there. The financing for a new intercontinental fleet for Austrian is unaffordable right now,” Spohr said.

http://atwonline.com/airframes/spohr-au ... et-renewal


I recall Mr Spohr previously had stated each LH subsidiaries would have to "earn" the right to earn groups capital investment.

Given how old some of their planes are...especially the 767s, can this be kicked down the road much longer?

LH act like a bully to SN and OS, but isn't even able to have their own house (Eurowings) in order

AirInterCRV wrote:

LH act like a bully to SN and OS, but isn't even able to have their own house (Eurowings) in order

Not really.

Its quite simple really - LH Group (like IAG) is a holding company. You want access to the bank coffers you need to earn it. Group will spend finite resources on units where it believes it can earn the best return.

How long can those old 767s last? And the oldest Lauda Air 777 aren't much younger either.
As higher oil prices set in making them profitable will be a mission impossible.

LAXintl wrote:

AirInterCRV wrote:

LH act like a bully to SN and OS, but isn't even able to have their own house (Eurowings) in order

Not really.

Its quite simple really - LH Group (like IAG) is a holding company. You want access to the bank coffers you need to earn it. Group will spend finite resources on units where it believes it can earn the best return.

I agree. If a group isn't able to earn new aircraft, they will be downsized.

So how can OS improve?

Lightsaber

How about moving toward a more leisure type of carrier, Lauda Air style? More of BKK, HKG and Mauritius?
Business class traffic moved from OS to LH apart from selected niche routes such as IAD and NRT.

Way to put OS in a tight spot, Mr. Spohr. I like the 767s but it seems an impossible hole to toss them into. :/

They have three 767s that are around 18-20 y.o. since manufacturing and three around 26. The younger could stay another 8-10 long years, just like those with Air Canada, while OS could find a way like Northwest did with the DC-10s back then, when they couldn't afford the new Airbus'. Though I'm not sure it's a real option for Austrian.

Perhaps possible that some of the routes Austrian flies simply are either loss making or just breaking even. The era of flying for national political prestige should be long gone at Austrian by now. Thus why should Austrian spend money on new aircraft for loss making routes ? At the very least this should concentrate minds of both management as well as pilots/cabin crew / ground staff at all LH group airlines into realising that profit is taken seriously

Spohr comes across as yet another hapless corporate neoliberal in an era where that awful ideology is dying.

Starving OS of more modern, fuel-efficient aircraft at a time of rising fuel prices, while expecting them to improve returns (ie savage their loyal staff’s benefits, T&Cs et al some more) is like knocking a hole in your boat as it enters choppy waters.

When will this era of accountant-driven capitalism evolve into something more enlightened? Sure profitability is necessary, but as the sole end goal it becomes toxic, as we’re finding out with the decline of British Airways.

TheLion wrote:

When will this era of accountant-driven capitalism evolve into something more enlightened?

What would that be? Why should anyone (or any holding company) continue to invest in a business that doesn't cover its cost of capital?

MIflyer12 wrote:

TheLion wrote:

When will this era of accountant-driven capitalism evolve into something more enlightened?

What would that be? Why should anyone (or any holding company) continue to invest in a business that doesn't cover its cost of capital?

Because Spohr and Scott Kirby (among innumerable other examples) are forgetting the old adage that sometimes you have to spend money to make money.

Or maybe they're just looking for a reason to kill OS and replace it with Eurowings. After everything they've put OS and its staff through since buying it, that'd be particularly cruel.

Maybe Jeff Smisek could take over as OS CEO when Spohr gets rid of the latest one!

TheLion wrote:

Spohr comes across as yet another hapless corporate neoliberal in an era where that awful ideology is dying.

Starving OS of more modern, fuel-efficient aircraft at a time of rising fuel prices, while expecting them to improve returns (ie savage their loyal staff’s benefits, T&Cs et al some more) is like knocking a hole in your boat as it enters choppy waters.

When will this era of accountant-driven capitalism evolve into something more enlightened? Sure profitability is necessary, but as the sole end goal it becomes toxic, as we’re finding out with the decline of British Airways.

LH is a group of airlines, so it makes sense to use the finite resource of money for new planes on the group members who promise the best return of investment.

Lufthansa is not interested in OS and SN, they want to boost EW ( which is by this time not making money at all ). As LH is in charge for managing OS it’s their fault if they don’t make enough revenue. They funnel the important business passengers through MUC/ZRH/FRA. In the near future OS will be simply integrated in EW ( and it’s poor service)!

I hope that they have figured out if the bad results are from the a/c operations (old a/c) or some other reason. If some other, then it shouldn’t be a big problem if new a/c are delayed
Although i think now is s good time to get A330neo... or maybe make Airbus struggle a little longer...

Do all other bigger airlines already has modern Long Haul fleets nowdays? Or OS is the only one that still operates older Long Haul fleet?

SQ789 wrote:

Do all other bigger airlines already has modern Long Haul fleets nowdays? Or OS is the only one that still operates older Long Haul fleet?

The BA 747s hold some age.

More disgusting news from Germany... They would try to do the same to Swiss if it wasn't their best performing airline in the group year on year now...

It's simple, to gain returns you must invest... Especially with these far more economical planes that are now available.

I can imagine that is the first step to integrate OS into Eurowings. Wait till the first A330s are stationed in Vienna.

Arion640 wrote:

SQ789 wrote:

Do all other bigger airlines already has modern Long Haul fleets nowdays? Or OS is the only one that still operates older Long Haul fleet?

The BA 747s hold some age.

They do. The oldest is 28 (but unlikely to last past this year) and the newest is 19. However unlike LH, IAG is allowing its subsidiary BA to obtain brand new planes as replacements.

kimimm19 wrote:

More disgusting news from Germany... They would try to do the same to Swiss if it wasn't their best performing airline in the group year on year now...

It's simple, to gain returns you must invest... Especially with these far more economical planes that are now available.

Even Swiss is not spoiled. They get only old generations aircraft. Of course, B777W is still a good and efficient aircraft today. But what in ten years? LX will struggle if fuel prices are high and it had to compete against competitors with a fleet that is 100% next gen (787 & 350).

kimimm19 wrote:

More disgusting news from Germany... They would try to do the same to Swiss if it wasn't their best performing airline n the group year on year now...

It's simple, to gain returns you must invest... Especially with these far more economical planes that are now available.

Indeed.
An airline must be profitable, but it must be allowed to, meaning you give them both the tools to fly and the freedom to fly where they want.

The LH Group however has a clear preference towards Lufthansa proper, as also evidenced by it's name, BTW: why not have a more neutral name like IAG for the holding company???

Because if this 'Germany First' approach, it's very difficult for any other airline of the group -except LX at ZRH, which is a real jackpot- to run a sufficiently large global network to live off, as doing so is quickly seen as an unloyal attack on Lufthansa itself, also having such network.

The reality is Lufthansa is already suffering from external competition more than it likes, so it doesn't want to see more internal competition: all that thus remains for the others are niche markets where LH is either maxed out on bilaterals (e.g. india or japan), or where it is incapable of operating (west and central Africa), combined with leisure routes where Lufthansa's cost base is completely unsuitable for: try making a profitable network with such a cluster, however!

Especially now that Spohr got the brilliant idea to create a pan-European but very German company, Eurowings, to target those leisure routes, which obviously once more gets the unambiguous preference over any other non-German company in the group, and you're stuck in the situation where both OS and SN are in: with a much lower operating cost than that of it's internal competitors LH and LX, yet only allowed to operate on a too small skeleton network, officially because they arent making a profit big enough to grow further.

If the LH Group wants to maximize it's profits and let all of it's companies flourish, rather than just the German ones, it should take away a significant number of flights with a high connecting ratio of passengers away from its high cost airlines LH and LX and put them at SN and OS: a Scandinavian for instance really doesn't care whether he passes through FRA/ZRH , or BRU/VIE to go to say south America, so a whole lot of intercontinental flights could just as well be operated out of other hubs but FRA or ZRH too, and most likely at a lower cost even!!!
It's just German centrism which prevents this, evidenced by the appointment of Germans as CEO at each and every airline of the Group, as if nobody else in Europe is able to run an airline profitable.

sergegva wrote:

kimimm19 wrote:

More disgusting news from Germany... They would try to do the same to Swiss if it wasn't their best performing airline in the group year on year now...

It's simple, to gain returns you must invest... Especially with these far more economical planes that are now available.

Even Swiss is not spoiled. They get only old generations aircraft. Of course, B777W is still a good and efficient aircraft today. But what in ten years? LX will struggle if fuel prices are high and it had to compete against competitors with a fleet that is 100% next gen (787 & 350).

That's a different story of idiocracy whereby LH has put Swiss behind the 8-ball now for nothing but lower upfront costs. Unless they get the a350 within the next ten years, their longhaul fleet will be a mess...

And having lived 5+ years close to FRA the new LH Livery I keep seeing more often is absolutely hideous. Still looks black and disproportionate. But they wanted a premium look...

Austrian aren't making decent profit due to many recent issues:
- Competituin from LCCs - with EasyJet making VIE their main EU base, WizzAir and Ryanair expanding OS is doomed short-haul
- Past VIE and OS position of connecting East and West, especially prominent past the Cold War is being perfectly covered by increased competition and OS simply doesn't have a profitable niche to own. Plus Lufhansa have been strengthening MUC to take over from VIE that East-West connectivity while intercontinental building at FRA.
- I think LH Group need their LCC pet project Eurowings to be successful and both OS and SN while still owning some important niches (such as SN's Africa routes) but not profitably enough to warrant a separate brand.

Austrian needs new life to survive on its own and even if they get 787-9 - imho best suited for a niche LCC-style op like Norwegian ultimately may allow OS a place in the Sun, otherwise EasyJet / WizzAir / Ryanair / Laudamorion menace will put the last nail in the coffin.

Not disagreeing with all that is being said above, including how idiotic some of Spohr's remarks are...
Still, I don't personally think that the somewhat older equipment is such a great big obstacle for OS... they provide such a gracious service, particularly in J, and frankly better than LH... VIE is a great airport, and their connections work very well. I'd personally take an old OS 767 via VIE any day over any LH via FRA...Not that LH is bad -by no means- but the service you get from OS is generally so much more personal.... I think this where the true strength of the company is: Austrian hospitality vs German functionality.

Servus!

[qoute]

“Ten percent of our [Lufthansa Group] aircraft is based in Austria, but only 4% of the group’s profit is generated there.[/quote]

Playing with statistics. Give OS A380s and they can fly with 4 % of the fleet.

oldannyboy wrote:

Not disagreeing with all that is being said above, including how idiotic some of Spohr's remarks are...
Still, I don't personally think that the somewhat older equipment is such a great big obstacle for OS... they provide such a gracious service, particularly in J, and frankly better than LH... VIE is a great airport, and their connections work very well. I'd personally take an old OS 767 via VIE any day over any LH via FRA...Not that LH is bad -by no means- but the service you get from OS is generally so much more personal.... I think this where the true strength of the company is: Austrian hospitality vs German functionality.

Servus!

I agree, and short to medium term, you're right, but on the long term, it's not sustainable.

The LH Group is way too Lufthansa, too German centered and it really shows: foreign non-Lufthansa non-Eurowings entities systematically need to earn any investments not once, not twice but trice even, whereas these 2 get full confidence up front, even if their cost base is -on both accounts- higher than that of the available alternatives and they aren't exactly great profit machines either!

As said: take away a bunch of (longhaul) planes and routes with a low O&D profile from EW/LH and give them to SN/OS: not only would they immediately improve their bottom line results by a lot, but thanks to their much lower cost base they'd also improve the Group's performance bibs lot!
FRA and LH are really nothing special and way below both SN/OS and BRU/VIE in terms of personalization, ease and comfort for both economy as well as business passengers, but hey: in the end you really start to believe you're a 5 star airline, even though everybody knows you just buy that rating from skytrax!

So when he says no new aircraft, does he mean no factory new aircraft, or no replacements at all (second-hand or hand-me-downs included)?

sabenapilot wrote:

kimimm19 wrote:

More disgusting news from Germany... They would try to do the same to Swiss if it wasn't their best performing airline n the group year on year now...

It's simple, to gain returns you must invest... Especially with these far more economical planes that are now available.

Indeed.
An airline must be profitable, but it must be allowed to, meaning you give them both the tools to fly and the freedom to fly where they want.

The LH Group however has a clear preference towards Lufthansa proper, as also evidenced by it's name, BTW: why not have a more neutral name like IAG for the holding company???

Because if this 'Germany First' approach, it's very difficult for any other airline of the group -except LX at ZRH, which is a real jackpot- to run a sufficiently large global network to live off, as doing so is quickly seen as an unloyal attack on Lufthansa itself, also having such network.

The reality is Lufthansa is already suffering from external competition more than it likes, so it doesn't want to see more internal competition: all that thus remains for the others are niche markets where LH is either maxed out on bilaterals (e.g. india or japan), or where it is incapable of operating (west and central Africa), combined with leisure routes where Lufthansa's cost base is completely unsuitable for: try making a profitable network with such a cluster, however!

Especially now that Spohr got the brilliant idea to create a pan-European but very German company, Eurowings, to target those leisure routes, which obviously once more gets the unambiguous preference over any other non-German company in the group, and you're stuck in the situation where both OS and SN are in: with a much lower operating cost than that of it's internal competitors LH and LX, yet only allowed to operate on a too small skeleton network, officially because they arent making a profit big enough to grow further.

If the LH Group wants to maximize it's profits and let all of it's companies flourish, rather than just the German ones, it should take away a significant number of flights with a high connecting ratio of passengers away from its high cost airlines LH and LX and put them at SN and OS: a Scandinavian for instance really doesn't care whether he passes through FRA/ZRH , or BRU/VIE to go to say south America, so a whole lot of intercontinental flights could just as well be operated out of other hubs but FRA or ZRH too, and most likely at a lower cost even!!!
It's just German centrism which prevents this, evidenced by the appointment of Germans as CEO at each and every airline of the Group, as if nobody else in Europe is able to run an airline profitable.

I concur and I wouldn't have written it better. LH group still sees itself as German instead of European

It is cheap to complain about the business decisions of the Lufthansa holding. But please don't forget there is a reason that Austrian, Brussels and Swiss are part of the Lufthansa group nowadays. As far as I can see all these airlines in the holding are currently in a much better economical state than as they were on their own or as their bankrupt predecessors Swissair and Sabena.
He who pays the piper calls the tune.

devron wrote:

Playing with statistics..

Are they counting the Austrian regional fleet ? Indeed it's not fair to compare like this.

sabenapilot wrote:

oldannyboy wrote:

Not disagreeing with all that is being said above, including how idiotic some of Spohr's remarks are...
Still, I don't personally think that the somewhat older equipment is such a great big obstacle for OS... they provide such a gracious service, particularly in J, and frankly better than LH... VIE is a great airport, and their connections work very well. I'd personally take an old OS 767 via VIE any day over any LH via FRA...Not that LH is bad -by no means- but the service you get from OS is generally so much more personal.... I think this where the true strength of the company is: Austrian hospitality vs German functionality.

Servus!

I agree, and short to medium term, you're right, but on the long term, it's not sustainable.

The LH Group is way too Lufthansa, too German centered and it really shows: foreign non-Lufthansa non-Eurowings entities systematically need to earn any investments not once, not twice but trice even, whereas these 2 get full confidence up front, even if their cost base is -on both accounts- higher than that of the available alternatives and they aren't exactly great profit machines either!

As said: take away a bunch of (longhaul) planes and routes with a low O&D profile from EW/LH and give them to SN/OS: not only would they immediately improve their bottom line results by a lot, but thanks to their much lower cost base they'd also improve the Group's performance bibs lot!
FRA and LH are really nothing special and way below both SN/OS and BRU/VIE in terms of personalization, ease and comfort for both economy as well as business passengers, but hey: in the end you really start to believe you're a 5 star airline, even though everybody knows you just buy that rating from skytrax!

Absolutely my friend, fully agree with you on all accounts! Personally I'd take SABENA's old A310s over LH A350s just for the mere personalized service and ease of transfer at Zaventem. I don't care much about bells and whistles on an aircraft, unless you get a friendly, personalized, caring, gracious service. LH is very efficient, but very standardized and often lack that extra bit of "personality" and friendly charm that you still find on SN, OS and LX. The smaller hubs in BRU, VIE and ZRH are wayyyy better/easier/friendlier than FRA.

oldannyboy wrote:

Absolutely my friend, fully agree with you on all accounts! Personally I'd take SABENA's old A310s over LH A350s just for the mere personalized service and ease of transfer at Zaventem. I don't care much about bells and whistles on an aircraft, unless you get a friendly, personalized, caring, gracious service. LH is very efficient, but very standardized and often lack that extra bit of "personality" and friendly charm that you still find on SN, OS and LX. The smaller hubs in BRU, VIE and ZRH are wayyyy better/easier/friendlier than FRA.

You mean the old Brussels Airlines A330's?

LOWS wrote:

Or maybe they're just looking for a reason to kill OS and replace it with Eurowings.

ding ding ding, I think we have a winner. After SN, OS seems to be the next victim for the EW expansion.

ei146 wrote:

It is cheap to complain about the business decisions of the Lufthansa holding. But please don't forget there is a reason that Austrian, Brussels and Swiss are part of the Lufthansa group nowadays. As far as I can see all these airlines in the holding are currently in a much better economical state than as they were on their own or as their bankrupt predecessors Swissair and Sabena.
He who pays the piper calls the tune.

Just comparing a REAL European aviation group like IAG with a pseudo-European group like LHG.

At the first Group, business decisions are made based solely on merits, not origin, as evidenced also by the fact that re CEO of British Airways (of all accounts!) is a Spaniard; in contrast at the second group, everything needs to constantly fit the German interests first, even if it is dead obvious that from a wider group perspective decisions sometimes should go against those German interest.

So a less egocentric approach is clearly possible for pan-European aviation holdings and it would likely go a long way in sorting out the mess EW is currently in, as they are trying to build what they already have mostly in house in fact, albeit not under a German flag.

I'm sorry but why keeping long hauls from Vienna when you can boost smooth connections to Munich and Frankfurt and save on planes, employees, slots and maintenance and boosting at the same time the occupancy on Lufthansa's planes with Austrian travellers

Lufthansa obviously want to kill long haul competition in Vienna just like in Brussels, the problem is that Europe is not anything like US where an airline can just move a hub to wherever they like (including shuting it down altogether), it doesn't work like that. The moment LH kills Austrian long haul the Austrian government will simply back up new airline to take over the lost routes.

They will be pressured to do it by austrian buissinesses that will threaten with massive economic impact for the country without direct intercontinental airline routs. The government acting in the intrest of Austria rather than in the intrest of Lufthansa will do everything it can so save the long haul network.

FatCat wrote:

I'm sorry but why keeping long hauls from Vienna when you can boost smooth connections to Munich and Frankfurt and save on planes, employees, slots and maintenance and boosting at the same time the occupancy on Lufthansa's planes with Austrian travellers

Bacause Munich is in Germany, not in Austria, it serves the intrest of Germans, the people of Austria will never put up with having to go through a German airport just to be able to do business abroad. They will launch a new airline like there is no tomorrow.

it does seem to me that LHG is locked in the refrain that the shareholders demand profits front centre and of course immediate. To be honest, I agree that this approach at BA has been nothing short of toxic in the short term but it has resulted in IAG loosening the purse strings and the A320NEO is arriving. That fleet renewal in particular was the bellweather as Willie Walsh specifically mentioned that shorthaul had to justify its existence and earn the aircraft.

With OS, Lufthansa Group does seem to be applying the same extremely strictly. An older rule of business was that you had to speculate to accumulate. OS should be given the chance to re-equip but at the same time restructure any lossmaking routes. Newer aircraft can also push those profits up by right-sizing as well as lower costs. Could an A339NEO sell more seats than a 763 on a specific route? Are there any routes that justify the 773ER like LX are operating? This would be better than an outright refusal.

LHCARGO was given the same sticks and carrots offer, either turn around Performance or fly the old MD11s. Cargo has turned around and could order 2 brand new 777F. With the Option to replace all remaining MD11 by 2025.

Austrian just got a new CEO If I am not mistaken and he Comes from LHCargo with the order to make OS profotable. They have 3 to 4 years to replace their current Long haul fleet before they fall apart.

Those who think that LH Plays the German Card or even Germany first are wrong. Fraport does not perform properly in LHs opiniom and has been told that some traffic wll be relocated tp VIE ZRH and MUC.

It is all about Performance and profitability and it is European, not German only.

lightsaber wrote:

LAXintl wrote:

AirInterCRV wrote:

LH act like a bully to SN and OS, but isn't even able to have their own house (Eurowings) in order

Not really.

Its quite simple really - LH Group (like IAG) is a holding company. You want access to the bank coffers you need to earn it. Group will spend finite resources on units where it believes it can earn the best return.

I agree. If a group isn't able to earn new aircraft, they will be downsized.

So how can OS improve?

Lightsaber

That's a tactic, not a strategy. I mean the Eurowings business must be taking up so much effort to sort.

[quote="PanHAM} and it is European, not German only.[/quote]
It's German dominated, a recurring theme in modern Europe. A tin ear does not make for a medium term strategy.

Begues wrote:

Lufthansa obviously want to kill long haul competition in Vienna just like in Brussels, the problem is that Europe is not anything like US where an airline can just move a hub to wherever they like (including shuting it down altogether), it doesn't work like that. The moment LH kills Austrian long haul the Austrian government will simply back up new airline to take over the lost routes.

They will be pressured to do it by austrian buissinesses that will threaten with massive economic impact for the country without direct intercontinental airline routs. The government acting in the intrest of Austria rather than in the intrest of Lufthansa will do everything it can so save the long haul network.

FatCat wrote:

I'm sorry but why keeping long hauls from Vienna when you can boost smooth connections to Munich and Frankfurt and save on planes, employees, slots and maintenance and boosting at the same time the occupancy on Lufthansa's planes with Austrian travellers

Bacause Munich is in Germany, not in Austria, it serves the intrest of Germans, the people of Austria will never put up with having to go through a German airport just to be able to do business abroad. They will launch a new airline like there is no tomorrow.

No I don't think so
We're in Europe and business are transnational, it makes absolutely no sense what you've written above. Government cannot "act in the interest of Austria" by starting up an airline because there are many EU regulations that inhibit this way of financing business, as AZ demonstrates with big EU sanctions coming towards italian govt for "acting in the interest of Italy by financing a long time dead national carrier".
Austrian Airlines is part of LHG so again nonsense because every time you "Fly Austrian" you indeed fly LHG so a big part of money goes in the German's pockets.
Why "Austrian Businessmen" that will launch a new airline "like there is no tomorrow" didn't buy Austrian Airlines at the first place?
Nationalism is dead and anachronistic in 21st century Europe

As someone who has to fly long haul from Vienna occasionally, I usually make a point of flying LH, not OS. Take LAX, last year. On the way to LAX, I used the direct OS flight. An old clapped out 777, no internet, not particularly friendly staff. Back, a LH 346 to MUC, with a connection to Vienna. Technically less convenient, but the overall level of service on the long haul leg was way better on the Big Stick. My favourite way to get to California are the LH 380 anyway: old 777 need not apply.

OS has great technical staff and pilots, but the hard product is not entirely up to scratch anymore. In a certain way, the airline is still recovering from decades of abuse by politicians and their cronies, who ran the outfit into the ground over several decades. Remember, they had to pay LH money to take over OS, not the other way around. Otherwise, it would have been the end of OS entirely.

FatCat wrote:

Nationalism is dead and anachronistic in 21st century Europe

I wouldn't wager any serious money on that premise just yet.

FatCat wrote:

We're in Europe and business are transnational, it makes absolutely no sense what you've written above. Government cannot "act in the interest of Austria" by starting up an airline because there are many EU regulations that inhibit this way of financing business,

Let me tell you a real story:
Last year, Spohr was openly saying wherever he came that SN would be folded into EW at the end of 2018 (when the grace period was over), something which really didn't go down well in Belgium;
The Belgian government explicitly had to make it clear to Mr. Spohr that the very generous and lucrative traffic rights held by SN under the Belgian bilateral agreements with numerous African countries are really not theirs and thus not LH's, but forever Belgian and that as such the government can at any time by a simple Royal Decree decide to award (part of) them to another designated carrier...
Such could become in the general interest of Belgium even, should it become clear that the sole reason as to why those traffic rights are currently awarded to a single privately and foreign owned carrier (i.e. hub and network building at BRU) is no longer the case... and a couple of months later, a long haul airline 'Air Belgium' was founded with -amongst others- money from Belgian regional government entities and which is currently aimed at serving just China, yet they have said they'd be interested in taking over some traffic rights to Africa too, if they'd get the chance.
Next thing you knew and Mr. Spohr asked for an audience with the King to explain he was misunderstood and since them the talk from Lufthansa is about the Eurowings GROUP and a 2 brand solution...
So yes, governments still have quite some leverage and they should use it to make sure that vital air links are not just taken away by foreign take-overs, because those links are part of the invisible infrastructure, important to support the nation's economy.
I really hope the Austrian government has as good a stick as Belgium to beat Spohr with too, or he'll move everything lucrative on long haul back to Germany, covering the remaining O&D market with EW.

FatCat wrote:

Nationalism is dead and anachronistic in 21st century Europe

in which case we look forward to a less Lufthansa centric name for the holding group, as well as the arrival of several non-German speeking CEOs at the different entities of the group, not to mention maybe a more cost oriented approach to the group's long haul route network, because these are routes which in most cases are predominantly filled with European feed anyway rather than O&D, so it would maybe make more sense to put (at least a few) new intercontinental routes at the airlines with the lowest CASM (SN/OS), rather than constantly at those with the highest CASM (LH)? Such would help both the bottom line of those entities as well as that of the Group, but of course it would cut at LH and its labour force: it's always easier to tell foreigners they need to adjust than it is to tell in your own countrymen, isn't it?.

aw70 wrote:

As someone who has to fly long haul from Vienna occasionally, I usually make a point of flying LH, not OS. Take LAX, last year. On the way to LAX, I used the direct OS flight. An old clapped out 777, no internet, not particularly friendly staff. Back, a LH 346 to MUC, with a connection to Vienna. Technically less convenient, but the overall level of service on the long haul leg was way better on the Big Stick. My favourite way to get to California are the LH 380 anyway: old 777 need not apply.

OS has great technical staff and pilots, but the hard product is not entirely up to scratch anymore. In a certain way, the airline is still recovering from decades of abuse by politicians and their cronies, who ran the outfit into the ground over several decades. Remember, they had to pay LH money to take over OS, not the other way around. Otherwise, it would have been the end of OS entirely.

OS has been in LH s hands for a while.
Give them the budget and they'll get equipment and products sorted.
So when you fly a crappy OS B777, you are flying a crappy Lufthansa group product. The OS managers are just LH puppets. If you look at how the SN CEO was kicked out and replaced by a German, you get the drift.

LH's interest in SN and OS is purely strategic. EW are loss making too but they get all the money they need while SN and OS are just used as placeholders to avoid that competitors establish hubs there.

Someone mentionned that the Austrian government cant back up a new Austrian carrier.
You are wrong, the Belgian government are hedging their bets and have invested funds into start-up Air Belgium. If LH pull out of the African routes from BRU, they will pull the trigger on Africa too.

Same with AZ. If the Italian government sees that LH doesn't maintain a mass that os of interest to the Italian economy, they'll just find a way to make sure the economy isn't affected by the doings of a foreign company. Americans like to call it a matter of national security.

SN is already rebelling with a warning strike.
I predict more strikes to come and not only at SN.

FatCat wrote:

Begues wrote:

Lufthansa obviously want to kill long haul competition in Vienna just like in Brussels, the problem is that Europe is not anything like US where an airline can just move a hub to wherever they like (including shuting it down altogether), it doesn't work like that. The moment LH kills Austrian long haul the Austrian government will simply back up new airline to take over the lost routes.

They will be pressured to do it by austrian buissinesses that will threaten with massive economic impact for the country without direct intercontinental airline routs. The government acting in the intrest of Austria rather than in the intrest of Lufthansa will do everything it can so save the long haul network.

FatCat wrote:

I'm sorry but why keeping long hauls from Vienna when you can boost smooth connections to Munich and Frankfurt and save on planes, employees, slots and maintenance and boosting at the same time the occupancy on Lufthansa's planes with Austrian travellers

Bacause Munich is in Germany, not in Austria, it serves the intrest of Germans, the people of Austria will never put up with having to go through a German airport just to be able to do business abroad. They will launch a new airline like there is no tomorrow.

No I don't think so
We're in Europe and business are transnational, it makes absolutely no sense what you've written above. Government cannot "act in the interest of Austria" by starting up an airline because there are many EU regulations that inhibit this way of financing business, as AZ demonstrates with big EU sanctions coming towards italian govt for "acting in the interest of Italy by financing a long time dead national carrier".
Austrian Airlines is part of LHG so again nonsense because every time you "Fly Austrian" you indeed fly LHG so a big part of money goes in the German's pockets.
Why "Austrian Businessmen" that will launch a new airline "like there is no tomorrow" didn't buy Austrian Airlines at the first place?
Nationalism is dead and anachronistic in 21st century Europe

Actually the opposite is true about Nationalism because of the consolidation... Hence the rise of separatist parties in Europe and Brexit, but we won't get into that...

FatCat wrote:

We're in Europe and business are transnational, it makes absolutely no sense what you've written above. Government cannot "act in the interest of Austria" by starting up an airline because there are many EU regulations that inhibit this way of financing business, as AZ demonstrates with big EU sanctions coming towards italian govt for "acting in the interest of Italy by financing a long time dead national carrier".
Austrian Airlines is part of LHG so again nonsense because every time you "Fly Austrian" you indeed fly LHG so a big part of money goes in the German's pockets.
Why "Austrian Businessmen" that will launch a new airline "like there is no tomorrow" didn't buy Austrian Airlines at the first place?
Nationalism is dead and anachronistic in 21st century Europe

Both nationalism and protectionism is definitely on the rise in Europe, EU sanctions against the Italian Government will achieve exactly cero, with all certainty it will increase hostility towards Brussels. Just the other day Luigi Di Maio threatened to leave the European Union. The same thing is happening all over Europe, Brexit was just the beginning. The Austrian Government would not be the one to start or finance the airline, but it would facilitate the birth of a new national carrier if the Germans decided to kill Vienna, that I would be willing to bet my life savings on. Otherwise would be political suicide. The national carriers are insanely important to small EU nations, having direct access to large parts of the world is absolutely critical for a small nations economy, Austria is definitely no excepion.

Just watch what will happen when LH kills Brussel Airlines.

Waterbomber wrote:

If you look at how the SN CEO was kicked out and replaced by a German, you get the drift.

Indeed, but he wasn't German and didn't want to help the Germans at dismantling SN.
But he did turn around a loss making legacy carrier into a profitable one, all while growing the number of passengers by almost 50% right at the doorstep of Ryanair's biggest continental base CRL! It frustrated MOL to the point he based a bunch of 737s at BRU too, some of which he pulled out again because he couldn't win the fight. Oh, and SN kept growing and remained profitable even throughout 2016, when they were locked out of their own hub for a fortnight due to terror attacks on BRU! Take a bow, Eurowings! ROTFL.
But no, he had to be replaced by some German puppet who's now facing a 2day strike within just weeks of her appointment, all while the company is quickly turning into the usual operational mess, typical whenever Germans take over something and things don't go exactly as planned...

Waterbomber wrote:

Someone mentioned that the Austrian government cant back up a new Austrian carrier.
You are wrong, the Belgian government are hedging their bets and have invested funds into start-up Air Belgium. If LH pull out of the African routes from BRU, they will pull the trigger on Africa too.

Same with AZ. If the Italian government sees that LH doesn't maintain a mass that os of interest to the Italian economy, they'll just find a way to make sure the economy isn't affected by the doings of a foreign company. Americans like to call it a matter of national security.

Indeed, and I really hope the Austrians don't let themselves be fooled by their German 'friends'...
If they are not being given the right tools to do the job with, failure is on Lufthansa, not Austrian.
As said: OS can do pretty much whatever LH does, but cheaper, so it's insane not to give them the tools they need and even give them a good start by shifting some capacity away from high cost LH to help them like a mother would do, rather than constantly pinch them like a stepmother.