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What Will Become Of AUA, Lauda, Tyrolean?

Sun Feb 25, 2001 3:59 am

there´s been much fuss about the ongoing quarrels within the austrian airlines group and how the entire ownership will translate into the future shape of the group.
there have been many articles, posts and statements on this forum and elsewhere on the net. certainly, there are many synergies to be found when forming an airline group under one main holding, f.e. same pilot training (lauda air is still conducting its pilot recruitments through a third company) which could be easily done under one roof. certainly there are many more benefits to be found which can be solved easily and thus save costs.
i´m not too familiar with AUA, NG, VO and so i personally don´t want to go in-depth. all i know of them i´ve got from the media and boards like this one. if anyone has precise info and you can share them, please feel free to do so.
however, my main question is, now that AUA intends to buy all the remaining stocks of lauda air, what do you think will the future AUA group look like, fleet-wise, operational-wise, network-wise?
i´d like to point out that all this speculation bases on my assumptions and what i know of.
we all know that all the three airlines are members of the star alliance.
tyrolean airways primarily serves regional routes from vienna and smaller austrian airports, and serves the thinner routes within the AUA-network.
lauda air is primarily a charter and leisure airline, but also has scheduled charter services. in addition, it serves some european destinations on a scheduled basis.
aua is the austrian flag-carrier and serves short to long-haul routes, all across europe and serves some of the most important cities in north america, the near east and asia.

lauda air is serving miami via munich but on many occasions this service was operated by AUA aircraft. in addition, AUA serves KIX, NRT and PEK (and SHA?), whereas Lauda serves south east asia, BKK, KUL, DPS, HKT and MEL and SYD.
so i´m asking if anyone sees a major change in the AUA/NG route policy?
the HKT, DPS, MEL and SYD services to me seem to be more of charter services and so i doubt that AUA would venture into these markets. however, rumours have it that lufthansa could want NG to give up its flights to KUL so that LH could reinstate their services to KUL (two carriers geographically so close serving such a small market doesn´t seem to make much sense). in this case, lauda air would probably move it´s operations from KUL to SIN which is a step LH is lobbying for.
in addition, both lauda air and tyrolean have commuter aircraft in their fleets. so i´m wondering if it made more sense if the CRJs would only be operated by tyrolean, which already´s got a strong commuter fleet and has a larger fleet of CRJs than lauda.
furthermore, both tyrolean and austrian have F-70s in their fleets. and now that´s the same with CRJs. wouldn´t it be better to have only one airline operating this type? i assume both have the same engine types and share further commonality given the fact that tyrolean and austrian have been partners for such a long time. well, i don´t know for sure.
there are certainly more things to pay attention to: different pilot contracts, different wages, different working conditions, different fleet policies, yields, economics, and so on. it´s never that easy as it looks on paper.
and let´s take a closer look at their fleets ( i´ve taken all this info from their current homepages so don´t blame me if it´s not up-to-date...)
tyrolean has a fleet of 6 F70, 10 CRJs and 18 DHC-8s, AUA operates an additional 6 F-70s and 12 M80s (soon to be phased out with the delivery of more a-320s/321s), 6 321s, 7 320s, 4 a-330-200s and 4 a-340s.
lauda air has a fleet of 8 737s (2 –300, 2 –400, 2 –600, 2 –800), 6 767-300s and two 777-200s, and 7 CRJs.
that´s quite a diverse fleet consisting of 96 planes and 9 different aircraft families.
now that austrian is taking hold of lauda and restructuring the entire group, i´m wondering what the lauda fleet will eventually look like. on the one hand, for such a small fleet, two different single-aisles types and widebody types (320 vs. 737, 330/340 vs. 767/777) doesn´t seem to make much sense, though it works with other carriers, but mainly larger ones.
on the other hand, i assume that at the moment it wouldn´t be such a good idea to replace the current lauda fleet, given that it is pretty young and that the entire AUA group is financially not very strong. that´s exactly what happened with sabena, they were financially weak and quickly exchanged their entire 737 fleet with
a-32xs and that became one of the main reasons for their current situation. ok, the lauda fleet is not as big as the sabena fleet, however i don´t think it´s a very good idea at the moment.

the integration of rheintalflug:
so far, i haven´t heard about anything regarding rheintalflug´s membership in team lufthansa.
as far as i understand, an 100% ownership of AUA wouldn´t exclude rheintalflug from being a teamLH member, which brings value and benefits to rheintalflug and thus to AUA as well. in addition, i don´t see a reason why rheintalflug should leave team LH and still, AUA and LH are very close partners.
if anyone has info about rheintalflug and team LH regarding the AUA stake, please let me know.

if anyone has news, insights, additional information or corrections to make, just go ahead!

If only pure sweetness was offered, why's this bitter taste left in my mouth.
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RE: What Will Become Of AUA, Lauda, Tyrolean?

Sun Feb 25, 2001 7:05 am

The three are all small carriers, why don't they just merge the three together?
Give me a break, I created this username when I was a kid...
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RE: What Will Become Of AUA, Lauda, Tyrolean?

Wed Mar 14, 2001 11:53 pm

Sorry i´ve missed this post, but OS - group related topics seem to be not the "main discussed issues".

I doubt that OS will play a very important role within Star besides LH. The future of the OS - group will be more a "feeder" for the LH network with a stake of LH into the entire group. The first steps with buying all compeditors VO, WE, NG are done. I think it is just a question of time to offer LH a stake into the entire company. LH is a far TOO big neighbor to stay independent. And there is no "friendship" in business, maybe kind of common interests. Honestly I don´t know why this country (Austria) since the empire broke down more then 80 years ago has a very specific inferiority complex - especially in economical reasons. And reality is that all mayor companies here have been or are going to be sold to German companies. The OS product really is better then it´s reputation - thanks to Niki Lauda and his pioneer job in a surrounding of "allotment minded" local political interests. But you know that Germany and Austria in the past did and sometimes still do have a very special sensitive relationship. I know from some OS - employees that after the split up with SR they personally would have preferred to join the "sky team alliance". All the pro's and contra's have been discussed and we know the result. Working together with LH was even in the early 90's "politically impossible" it has changed now. Thats why they went together with SR. The reason of joining Star under the wings of LH was the "easy going way" preventing OS of a selfdestroying war with LH. (Better sleep with the enemy than fight the enemy). LH will settle the rules for OS that is more than clear. I doubt that the "relationship" is really that efficient like some OS people would like to have it. Just take a look into the schedules between Germany, Austria and the Scandinavian Countries. While OS and SR in their unlucky alliance established a shuttle service between ZRH and VIE, LH/SK/OS didn't even change anything except codesharing on existing flights. They still seem to be compeditors, flights of both carriers departing within 10,20 - 30 minutes. And then 2 - 3 hrs nothing. And then checking the service on OS on its flights - it is - sorry but true - much better then that one on LH like "OK we are the better german airline". Partners or compeditors?

I don´t understand the entire OS group concept at all. It´s changing all the time. They are "splitting" the group into business destinations -> OS, Regional -> VO/WE, Leisure -> NG. What defines a business and what a leisure destination. Presently it seems that all group members are operating everywhere mixing up business and leisure destinations anyhow. Charterflights btw. are operated by all 4 group members - wired. The new Lauda CEO - former OS employee - started to question the concept of splitting the network (interesting when Niki did that nobody was interested into it).

Or what is the membership in Star good for?
For exampel North America:This decision of suspention of the VIE/ORD flight for 3 months because of economical reasons. Book a flight with a Star carrier from North America to eastern Europe. On the internet (UAL/AC homepages)one year after OS joined this Alliance all flights to eastern Europe are still routed on UA/AC/LH via FRA/MUC. Not even one suggestion for a routing on OS via VIE into their primary market yet. Next there is no codesharing between UA and NG on the MIA-MUC-VIE route. UA operates important South American Markets out of MIA. Maybe that will change now with their DOT Appr. Interesting as well - AC doesn't have the Toronto - VIE flight, starting Apr. 28, in their online reservation system yet. And UA said the won´t fly into VIE with their own planes in the next future.

For the Asian market, OS never operated or thought about operating any of the Lauda Air routes there. They opened up routes with success adding flights after one year of operation like to SHA and PEK and suddenly (!) over night SHA wasn´t a success anymore and suspended. They also have been talking about a 3rd Destination in China - well they planned to fly into Hong Kong, that was the reason why NG took out of this market and what happend? Or Japan. Osaka from summer on 5-6 times per week while Tokyo because of regulations only 2 times per week and one codesharing on an ANA 747 per week. Which destination is the more important one Tokyo or Osaka or both? DEL is interesting and increasing but holiday or business? But what happend to Almaty? I`ve heard the had to get out of there because LH wanted them to do. Or SIN - OS forced Lauda to change from SIN to KUL en route to Australia to support the former codeshare with SIA, now SIA cancelled VIE to concentrate their operations into FRA. Obviousley on a first view it would make sence to re-route the Lauda flights to SYD and MEL from KUL (to compliment LH) to SIN - but that would mean to compete with SIA between SYD, MEL and SIN and with LH between MUC and SIN. TG used to fly into Vienna a couple of years ago, now they are in MUC. While NG still operates 5 flights per week to BKK. Or Africa, i have heard that JNB was very successfull but not really forced from Vienna...why?

And finally there is presently not one "international" Star member airline (except LH/SK but this is EU - domestic traffic) flying into the OS hub. And honestly it seems that OS is not interested in changing that to save at least their home base.

About the fleet - too many different types for sure but imagine the costs of a complete fleet renewal. Sooner or later they need to think about that. I would sell the CRJ, D 8-300, MD's and FK's and go for the Dornier jet family for "regional operations". And because of the family concept go for mix of A330-200/A340-300,500 And now maybe some "patriotic" people will hate me but i would firm as "Austrian Airlines" using one livery....with subtitles "operated by....)

Best regards
Servus aus Wien


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RE: What Will Become Of AUA, Lauda, Tyrolean?

Thu Mar 15, 2001 4:24 am

Hi there,
I hate to see AUA and Lauda in such
a situation. The future for the Austrian
carriers looks less than bright. Thanks to
the EU.
Practically seen, Austria is joining the
Posts: 648
Joined: Tue Dec 19, 2000 10:47 pm

RE: What Will Become Of AUA, Lauda, Tyrolean?

Thu Mar 15, 2001 5:07 am

Advancedkid, unfortunately it may look like that but it isn´t. As a born Austrian i would like to ask you please don`t discribe the situation with using the word "Anschluss". This term besides others is part of the really shi**y history of both Germany and Austria, even more than 60 years ago - it is still very present, we grow up and we are living with that but it is not genetic so i hope this is something what never will happen again. Even the reading of the word "Anschluss" shakes me. Fact is that german companies are working very hard on their success. Austrians seem to work hard as well but then instead of buying others we are waiting in our little alpine garden for buyers.

Best regards and servus
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RE: What Will Become Of AUA, Lauda, Tyrolean?

Thu Mar 15, 2001 6:22 am

One thing that strikes me the most about the Austrian market is that there way too many airlines competing with each other in a country of only 8 million people. All the external factors (the oil prices, the dollar/euro rate, etc), the problems between AUA and the Tyrolean/Lauda personnel have only made the situation worse. But while AUA was only able to cover its operating losses with aircraft sales and extra incomes from their stakes in other companies (dividend, etc), their bosses are trying to play the good guys, who are helping an airline in difficult financial situation (NG). But I get a feeling that NG only got the fin. problems because of AUA. NG was cut off from very interesting and probably profitable European routes and forced to mainly survive from the charter business. The AUA used the chance perfectly though and managed to take over NG and get rid of Nikki Lauda, who was basically like the only person in their way to total control.

I'm not sure how the whole things will end, but I think there are numerous possible scenarios:
1. One holding, 3 "independent" carriers, with areas of influence strictly divided between them (AUA - scheduled European/Intercont; VO - regional, feeder; NG - charter)
2. I've heard there are plans of merging VO and NG.

The "Airline Austria" scenario (all 3 cariers merged into 1) that someone on the thread's suggested is ompossible I think, beacuse it won't be approved by the government (it would be a monopoly).

There are also rumors that LH will buy a major stake in AUA and thus will take over the whole AUA Group (exactly what Rickster was talking about)
We shall see wht happens, but I think its a pity that all the important Austrian airlines (incl. WE) are under one roof now.
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RE: What Will Become Of AUA, Lauda, Tyrolean?

Thu Mar 15, 2001 4:49 pm

The problem in trying to describe the future or the OS-Group is that they don't know what they want themselves.
Concerning the location of hubs in Europe, the Wings alliance with AF and DL would have been the far better solution, but it would have started a war on one of OS's main markets: flights to Germany. So, Star protected a lucrative market, but endangers others.
The proximity of hubs in Star Alliance is the main problem. Currently LH is still expanding in FRA, which will come to an end fairly soon, as the airport is overloaded. MUC still has some capacities, but is on a good way of becoming one of the most unreliable hubs in Europe. Their airspace is limited, already resulting in major delays. The airport itsself is a big mess if you intend to transfer. The current terminal is not designed for large loads of transit passengers, it was intended for destinating passengers. The second terminal won't really make it better, as the ways will be getting even longer, and a people mover system is not even in planning stages yet. VIE is the only airport offering capacities, few delays and short transfers. The intended split of north/south traffic thru MUC and east/west thru VIE, which eventually will have to happen, considering the traffic loads at LH's hubs and LH's inability to staff its fleet (yes, they have already grounded airplanes due to the lack of crew). This split is currently prevented by MUCs boss, as still thinks he has to have everything he can grab, well but he will eventually choke on it....
Unfortunately, the current OS management is a little to busy crawling up LH's a*s, instead of sharpening their own profile and taking adtvatange of the good position they are in.
Oh, and Advancekid, OS did not take any routes from NG, they actually gave up good routes and transfered them to NG, where they turned into big lossmakers, due to absolute miss-management by Mr Lauda, not the other way around.

Just my $0.02 worth

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RE: What Will Become Of AUA, Lauda, Tyrolean?

Fri Mar 16, 2001 6:47 am

well, there have been really some educated posts on this forum!!!
i totally agree that it seems to have been a decision by OS to prevent the worst case scenario, regarding competition with LH. in addition, i think as well that joing skyteam would have been a very good choice, but as rickster pointed out, better sleep with the enemy than fight the enemy, and for OS LH could have been a much fiercer competitor than AF is.
however, i really do think that OS is an excellent airline (i´m not talking about the management and internal differences now) and that it´s certainly a nice addition to any alliance.
as for some flights leaving within in a couple of minutes and then no flights for the next three hours, i think that´s because of the "traffic waves" when many planes, f.e. in FRA, meet within the same period of time to pick up transfer pax. if we take a look at the schedule for the flights between VIE and FRA, f.e., the flights offered allow for good and vast connections on the LH network. and all of the "duplicated" flights leaving within 10, 30, 40 minutes of each another arrive in FRA during these waves. so i assume these additional flights are meant to offer extra capacity for transfer pax. and for LH and OS not having adjusted their schedule massively, i think that´s because they already code-share before OS joined star and if we looked at the schedule of that time we recognize that the times haven´t changed very much. so to me it seems that they didn´t want to change a schedule which has proven to be efficient.
let me point out that with this explanation, i´m only referring to the FRA/VIE flights, i didn´t take a closer look at other city-pairs. i wouldn´t be surprised if this proves to be the same for, let´s say, MUC/VIE, though, ...

take care
If only pure sweetness was offered, why's this bitter taste left in my mouth.
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RE: What Will Become Of AUA, Lauda, Tyrolean?

Fri Mar 16, 2001 7:28 am

There has been some increase in the VIE-FRA traffic, although not in terms of the traffic frequency but certainly in volume. As of summer timetable, LH will operate A300-600 on some flights in his segment.

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