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Alternative to Austrian Airlines

IAG wants to nab Vienna from Lufthansa

The negotiations of Austrian Airlines on state aid are proving difficult. Now two competitors are apparently offering themselves as alternatives in Vienna.

Swiss and Edelweiss first reported a breakthrough. The two Lufthansa subsidiaries in Switzerland secured state aid in the form of guaranteed loans at the end of April. At Lufthansa in Germany, negotiations with the government are still ongoing, as are negotiations with Brussels Airlines in Belgium and Austrian Airlines in Austria.

The government of Austrian Chancellor Sebastian Kurz made it clear from the outset that state aid for Austrian Airlines would only be available if Lufthansa provided something in return. One possibility would be a stake in Lufthansa. But this is rejected by the group, as the newspaper Die Presse reported with reference to negotiations on Monday (April 4).

IAG has already reached level in Vienna

In the event that the rescue should fail, two other aviation giants have meanwhile knocked on the door of the Austrian government: Etihad Airways and the British-Spanish aviation company IAG. Both offer themselves as an alternative to Austrian Airlines to provide Vienna International Airport as a hub with planes and connections.

British Airways’ parent company IAG has already stationed an airline at Vienna International Airport in the form of the low-cost carrier Level Europe. It should therefore be relatively easy to expand with long-haul jets. IAG and its alliance Oneworld may find it attractive to take over the Vienna hub from Lufthansa and the Star Alliance.

Etihad to start flights soon

Etihad Airways originally planned to start flights between Vienna and Abu Dhabi with Boeing 787s on 22 May, but postponed this until 1 July because of the corona crisis. From 2014 to 2017 Niki had already served the route as Air Berlin subsidiary and Etihad feeder. The gulf carrier now concentrates more on appealing point-to-point connections than on hub connections.

In any case, the names IAG and Etihad should give Austria’s government a good opportunity to increase the pressure on Lufthansa. After all, there are certainly other possibilities than a state participation in the group. According to Die Presse, there is also a debate about whether Lufthansa Austria could sign over Austrian aircraft. However, it should be borne in mind that the airline’s fleet is no longer the youngest, with an average age of more than 15 years.

Fierce price war in Vienna

At the beginning of April media reports had stated that Lufthansa was considering no longer using Vienna as a hub. However, a spokesman for the Group immediately denied this and stated: «There are no plans at all for a change in hub logic for the period after the Corona crisis.»

Even before the corona crisis, Austrian Airlines had already come under pressure in Vienna again due to competition from low-cost carriers from the Ryanair subsidiary Lauda and the Hungarian Wizz Air. In the course of the pandemic, the airline submitted an application for government assistance totalling EUR 767 million at the end of April. Most of the sum is in the form of repayable loans, but direct subsidies are also to flow.

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