Austrian Airlines
Austrian Airlines is the flag carrier of Austria and a subsidiary of Lufthansa, the flag carrier of Germany. The airline is headquartered on the grounds of Vienna International Airport in Schwechat where it also maintains its hub. As of July 2016, the airline flew to six domestic and more than 120 international year-round and seasonal destinations in 55 countries and is a member of the Star Alliance.
Air Austria and Austrian Airways merged to form the airline in 1957, but its history dates back to the founding of Austrian Airways in 1923. Throughout much of the company's existence, it was a state-owned entity. On 31 March 1958, the airline performed its scheduled service, flying a leased Vickers Viscount from Vienna to Zürich and London; it subsequently purchased its own Viscount fleet. On 18 February 1963, Austrian ordered its first jet-powered airliner, the Sud Aviation Caravelle. It subsequently introduced various models and derivatives of the Douglas DC-9 jetliner; by the end of 1971, Austrian was an all-jet operator. During the 1980s, it introduced the DC-9-80, otherwise known as the McDonnell Douglas MD-80, to its fleet. Various airliners produced by Airbus, Boeing, Fokker and other manufacturers were introduced across the 1980s and 1990s.
Throughout the 1990s, the airline sought out new strategic alliances, as well as to expand its presence in the long-haul market, launching new services to China and South Africa. In 2000, Austrian became a member of Star Alliance; a few years prior, it had also joined the Qualiflyer Group. During the 2000s, the airline expanded through the acquisitions of Rheintalflug and Lauda Air and adopted the shortened Austrian name in 2003. Throughout the 2000s, Austrian sustained several years of losses; during 2008, the airline's then-owner, the Austrian government, was advised to privatise Austrian via its sale to a foreign company. In 2009, the Lufthansa Group purchased Austrian after receiving approval from the European Commission following an investigation into the tendering process.
Following its privatisation, the business restructured, enacting both fleet expansion and cost-saving initiatives; visible changes included route alterations, a new corporate design, and a revised aircraft livery. Following labour disputes over several of the cost-cutting measures, all Austrian Airlines' flights were transferred on 1 July 2012 to its subsidiary, Tyrolean Airways, which operated under the Austrian name. A new labour agreement led to the transfer of all flights back to Austrian Airlines on 1 April 2015, and the merger of Tyrolean Airways into its parent company. During the late 2010s, restructuring of both its fleet and route network continued.
History
Early years
On 3 May 1923, Walter Barda-Bardenau received approval from the Austrian government to establish an airline. He participated in the newly formed Austrian Airlines with one percent, with the remaining shares going to the Austrian railway transportation company and the Junkers-Werke.The company's initial fleet consisted of Junkers F 13s. On 14 May 1923, the first flight performed by the fledging airline was conducted between Vienna and Munich, piloted by Hans Baur. The landing occurred in Jedlesee, followed by a conversion to a float and a subsequent flight to Budapest. Junkers Trans European Union was the company operating the flight. Its destinations included Munich, Budapest, Nuremberg, Graz, Klagenfurt, and St. Wolfgang. Seaplanes served targets in Austria. September 1926 saw the dissolution of the union.
From 1927, the company procured new aircraft with support from the government. During the same year, it formed an operating partnership agreement with Deutsche Luft Hansa. The two companies jointly planned and operated line connections and created a route network to Berlin, Budapest, and Milan. In 1932, Luft Hansa Junkers held a 49% interest in the company. Following its recovery from the Great Depression, the firm expanded its fleet by adding several Junkers Ju 52/3 m. The firm's rapid growth throughout the 1930s led to it becoming the fourth-largest airline in Europe at one point.
In 1938, the company began planning routes to Rome, Paris, and London, using a fleet of Junkers Ju 90 aircraft. Following the annexation of Austria by Nazi Germany in March 1938, these plans were promptly abandoned. From 1 January 1939, the airline was fully under the control of Lufthansa. Lufthansa deleted the company from the commercial register in June 1939.
After the Second World War, Austria was again separated from Germany. While it regained its independence due to the Austrian State Treaty of 1955, the newly reconstituted nation initially lacked a national airline. In 1955, two distinct companies, Air Austria and Austrian Airways, swiftly emerged to address this unoccupied market. On 4 April 1957, Austrian Airlines was formed under the corporate name Österreichische Luftverkehrs AG through the merger of Air Austria and Austrian Airways. On 30 September 1957, the new entity commenced operations, performing its maiden flight on 31 March 1958 when a leased Vickers Viscount 779 took off from Vienna for a scheduled service to Zürich and London.
During early 1960, six new-build Viscount 837s were delivered to Austrian Airlines; unlike earlier aircraft, which had been leased, these were owned by the company and quickly displaced the former. Operations expanded quickly, opting to launch domestic services for the first time on 1 May 1963. Within ten years of operations, Austrian Airlines' financial situation had improved considerably; its share capital had reportedly increased from an initial ATS 60 million to reach ATS 290 million in 1957.
Jet era
During its first decade of operation, Austrian Airlines experienced competition from Adria Airways; passengers from the Austrian provinces of Styria and Carinthia were routinely commuting to neighbouring Yugoslavia to use airports in what is now Slovenia. On 18 February 1963, Austrian Airlines ordered its first jet airliner, the Sud Aviation Caravelle, which operated in an 80-seat configuration. During 1969, the airline broke new ground with the launch of its first long-distance route to New York City in the United States. However, the operations ceased on 31 March 1971 due to low traffic.The Caravelle formed a core part of Austrian Airlines' fleet until 1973. Deliveries of the American-built jetliner, the Douglas DC-9, commenced in 1971. Starting in 1971, Austrian Airlines opted to standardise its fleet. By the end of that year, the firm had permanently withdrawn all Viscounts, leaving it with an all-jet fleet. Austrian Airlines centred its new fleet around a core of nine DC-9-32s, which it would operate for short- and medium-haul flights for many years. Austrian Airlines introduced the first of five DC-9-51s, an improved model, into service during 1975.
On 13 October 1977, Austrian became the first customer for the DC-9-80, placing an initial order for eight. On 26 October 1980, the first MD-81, which was capable of longer-range flights than earlier models, made its first commercial flight with the airline, flying from Vienna to Zürich. During 1984, Austrian became the first customer for the MD-87 and played an influential role in its development. The first MD-87 entered service at the end of 1987, as did the MD-83 from 1990, while six of the airline's MD-81s were upgraded to MD-82 standards. On 26 March 1989, Austrian Airlines inaugurated its first regular long-haul route, to New York-JFK, using an Airbus A310-300, aptly named "New York".
In 1988, Austrian Airlines underwent an initial public offering on the Vienna Stock Exchange, although the majority of shares in the company remained held by the Austrian government at this time.
Developments from 1990 to 2008
Throughout the 1990s, many airlines focused on cooperation and alliances. Swissair founded Qualiflyer, which Austrian joined early. This was also a period of quick expansion in the long-haul market, launching new flight paths to China and South Africa. During the late 1990s, Austrian Airlines developed an appetite for acquisitions; during March 1997, it bought a 35 per cent stake in Lauda Air while an 85.7 per cent shareholding in Tyrolean Airways was acquired in December of that year. Two years later, the airline wholly acquired Tyrolean Airways, making it a subsidiary. In 1999, Austrian Airlines launched the ability for customers to book flights via the Internet.On 26 March 2000, Austrian became a member of Star Alliance. During January 2001, it acquired a majority of the shares in Lauda Air; one month later, the airline also bought all of the shares in Rheintalflug. Austrian Airlines' operating name was shortened to Austrian in September 2003; it also renamed its three constituent carriers during this rebranding. Austrian and Lauda Air merged their flight operations departments into a single unit on 1 October 2004, leaving Lauda Air solely as a brand name for charter flights. It had 6,394 employees. In March 2004, it launched its Focus East plan, expanding the airline's destinations across Central and Eastern Europe to 38; as a consequence, the Austrian Airlines Group became a market leader within this region.
Austrian Airlines adopted a stringent cost-saving policy in October 2006, eliminating over 500 jobs in 2007. Austrian Airlines cancelled several long-haul destinations, including Sydney via Kuala Lumpur, Melbourne via Singapore, Kathmandu, and Shanghai. Tyrolean Airways received the three remaining Fokker 70s. The decision also included abandoning the long-haul Airbuses, which included four Airbus A340s and four Airbus A330s, in favour of standardising the fleet with Boeing 777s and Boeing 767s. Austrian Airlines removed complimentary in-flight meals and alcoholic drinks on short-haul services, introducing a "Self Select Bistro Service", except on flights from London and any flights above 100 minutes in duration. Head office moved from Oberlaa in Vienna's Favoriten district to Vienna International Airport in 2007, whereas headquarters remained in Vienna.
Following a modest profit of €3.3 million in 2007, the financial guidance for 2008 underwent several negative changes, culminating in an expected loss of €475 million by the end of November.