And what is the source of this "rumour"? As correctly mentioned above, Etihad is in no way able to contribute any funds to another carrier.

MoKa777 wrote:

Sit down Etihad!

Heheheheheh

No No No! I've got the biggest, fattest, deepest pockets of all you lot! And with COVID-19 I'm a gonna run amok all over the place and flex my parents' deep deep pockets!...


Faro

JamesCousins wrote:

British Airways alone made an operating profit of nearly €2 billion last year, the option they had would have been to stop paying hefty dividends left right and centre, taking liquidity out the business and prioritizing takeover bids over existing group operations. Making 20,000 people redundant hasn't single-handedly saved those jobs. In the case of VS I get it, they're running on empty and have to make drastic cuts to the workforce - it's sad but I appreciate the necessity. Furthermore, acquiring Austrian isn't the difference between IAG surviving or not - if anything it's a risk, it's something which will require further investment especially if the Austrian government have their way. I am all for free markets and businesses going through mergers/acquisitions etc, but it's not the time imo.

Thats a criticism that could equally be levelled at all enterprise in the capitalist system. Extracting profit from the business for shareholder return is the premise that all investment is made on. That is what drives the share price, or the value of the company, which is meaningless of itself. Have you stashed away every last penny of your discretionary income? No socialising, nothing other than the most basic of garments, etc? That is what you are expecting IAG to have done. Because if everyone had we would have much less need for individuals to be bailed out, or "social support" whatever you wish to term it.

I think IAG is in a position to take calculated risks at this point. Every IAG aircraft that is flying now is adding cash to the business, but the fixed costs are gobbling that. It is, by far, the most financially sound of the big EU3, Ryanair and Wizz also seem to have a robust business model. IAG are incredibly astute operators/competitors/opportunists. While Austrian would not solve every issue IAG has with LEVEL Anisec, it would give them a foothold into the Central European market, where IAG is weak and has no JV partner, or likely partner. I agree that LH would have no interest in letting this happen - but they are very concerned about Government interference in their business and the effect it could have on the group.

I think this is unlikely, but I can see why IAG would be interested in this kind of opportunity.

If they do buy OS from LH, I hope that a EU ruling could force IAG to sell AI to LH, thereby creating a competitor to BA in the UK, and a competitor to LH in Germany. The new LH-AI could become a competitor to BA through expansion into the UK, whereas the new BA-OS could become a competitor to LH through expansion into Germany.

The only thing that I would say is that OS is a far stronger brand than BA with a far superior service. I'd rather have the airline stay with LH or fall into the hands of KLM or SAS. KLM or LH would be ideal in expanding to the UK. In fact, I'd rather have both OS and AI fall into the hands of an Asian airline than IAG.

airhansa wrote:

If they do buy OS from LH, I hope that a EU ruling could force IAG to sell AI to LH, thereby creating a competitor to BA in the UK, and a competitor to LH in Germany. The new LH-AI could become a competitor to BA through expansion into the UK, whereas the new BA-OS could become a competitor to LH through expansion into Germany.

The only thing that I would say is that OS is a far stronger brand than BA with a far superior service. I'd rather have the airline stay with LH or fall into the hands of KLM or SAS. KLM or LH would be ideal in expanding to the UK. In fact, I'd rather have both OS and AI fall into the hands of an Asian airline than IAG.

OS is a far stronger brand than BA? In Austria itself maybe but elsewhere it sure as hell is not.

RvA wrote:

airhansa wrote:

If they do buy OS from LH, I hope that a EU ruling could force IAG to sell AI to LH, thereby creating a competitor to BA in the UK, and a competitor to LH in Germany. The new LH-AI could become a competitor to BA through expansion into the UK, whereas the new BA-OS could become a competitor to LH through expansion into Germany.

The only thing that I would say is that OS is a far stronger brand than BA with a far superior service. I'd rather have the airline stay with LH or fall into the hands of KLM or SAS. KLM or LH would be ideal in expanding to the UK. In fact, I'd rather have both OS and AI fall into the hands of an Asian airline than IAG.

OS is a far stronger brand than BA? In Austria itself maybe but elsewhere it sure as hell is not.

OS is a far higher quality band in Continental Europe, where this new venture is supposed to be focused on. BA might be more valuable in intercontinental flights but that's in part because people travel between the East Coast of the US and UK.

airhansa wrote:

RvA wrote:

airhansa wrote:

If they do buy OS from LH, I hope that a EU ruling could force IAG to sell AI to LH, thereby creating a competitor to BA in the UK, and a competitor to LH in Germany. The new LH-AI could become a competitor to BA through expansion into the UK, whereas the new BA-OS could become a competitor to LH through expansion into Germany.

The only thing that I would say is that OS is a far stronger brand than BA with a far superior service. I'd rather have the airline stay with LH or fall into the hands of KLM or SAS. KLM or LH would be ideal in expanding to the UK. In fact, I'd rather have both OS and AI fall into the hands of an Asian airline than IAG.

OS is a far stronger brand than BA? In Austria itself maybe but elsewhere it sure as hell is not.

OS is a far higher quality band in Continental Europe, where this new venture is supposed to be focused on. BA might be more valuable in intercontinental flights but that's in part because people travel between the East Coast of the US and UK.

I disagree. Austrian has a great product and good reputation but British Airways has a much stronger brand recognition and equally has a premium reputation. (Not justified these days any more but it still has it) I’d say in places where both operate BA is more likely than not be a stronger brand if only for the fact they’ve got significantly more network to offer making it more likely for someone to fly them.

airhansa wrote:

If they do buy OS from LH, I hope that a EU ruling could force IAG to sell AI to LH, thereby creating a competitor to BA in the UK, and a competitor to LH in Germany. The new LH-AI could become a competitor to BA through expansion into the UK, whereas the new BA-OS could become a competitor to LH through expansion into Germany.

The only thing that I would say is that OS is a far stronger brand than BA with a far superior service. I'd rather have the airline stay with LH or fall into the hands of KLM or SAS. KLM or LH would be ideal in expanding to the UK. In fact, I'd rather have both OS and AI fall into the hands of an Asian airline than IAG.

BA doesn't own AI. Why would be LH interested in Air India to get in to the UK market? Not least LH was big in the UK with BMI and gave up on it.

lhrnue wrote:

airhansa wrote:

If they do buy OS from LH, I hope that a EU ruling could force IAG to sell AI to LH, thereby creating a competitor to BA in the UK, and a competitor to LH in Germany. The new LH-AI could become a competitor to BA through expansion into the UK, whereas the new BA-OS could become a competitor to LH through expansion into Germany.

The only thing that I would say is that OS is a far stronger brand than BA with a far superior service. I'd rather have the airline stay with LH or fall into the hands of KLM or SAS. KLM or LH would be ideal in expanding to the UK. In fact, I'd rather have both OS and AI fall into the hands of an Asian airline than IAG.

BA doesn't own AI. Why would be LH interested in Air India to get in to the UK market? Not least LH was big in the UK with BMI and gave up on it.

Sorry EI. My brain automatically tries to think of the connection between code and airline name, so Air Lingus should be "AL" but not "EI".

How can Etihad be an alternative to OS? By offering transfers via AUH or...? I am confused.

RvA wrote:

airhansa wrote:

If they do buy OS from LH, I hope that a EU ruling could force IAG to sell AI to LH, thereby creating a competitor to BA in the UK, and a competitor to LH in Germany. The new LH-AI could become a competitor to BA through expansion into the UK, whereas the new BA-OS could become a competitor to LH through expansion into Germany.

The only thing that I would say is that OS is a far stronger brand than BA with a far superior service. I'd rather have the airline stay with LH or fall into the hands of KLM or SAS. KLM or LH would be ideal in expanding to the UK. In fact, I'd rather have both OS and AI fall into the hands of an Asian airline than IAG.

OS is a far stronger brand than BA? In Austria itself maybe but elsewhere it sure as hell is not.

I would say Austrian Airlines is a much stronger brand in eastern Europe and the Balkans, in countries placed between Greece in the south and Poland in the north (Poland included). British Airways isn't really a big player in this area.

Blerg wrote:

RvA wrote:

airhansa wrote:

If they do buy OS from LH, I hope that a EU ruling could force IAG to sell AI to LH, thereby creating a competitor to BA in the UK, and a competitor to LH in Germany. The new LH-AI could become a competitor to BA through expansion into the UK, whereas the new BA-OS could become a competitor to LH through expansion into Germany.

The only thing that I would say is that OS is a far stronger brand than BA with a far superior service. I'd rather have the airline stay with LH or fall into the hands of KLM or SAS. KLM or LH would be ideal in expanding to the UK. In fact, I'd rather have both OS and AI fall into the hands of an Asian airline than IAG.

OS is a far stronger brand than BA? In Austria itself maybe but elsewhere it sure as hell is not.

I would say Austrian Airlines is a much stronger brand in eastern Europe and the Balkans, in countries placed between Greece in the south and Poland in the north (Poland included). British Airways isn't really a big player in this area.

Not in Poland. For 2019:

BA 315k pax
OS 206k pax

Within LHG even Swiss had more pax in Poland (295k) and Brussels only shortly behind (174k).

Whereas it might be a great fit for IAG or Etihad to purchase OS due to East European destinations, I think many people underestimate the power that LH as a group offers with regards to connectivity throughout Europe, especially within the Star Alliance Network. BA or Etihad would have to invest quite a lot to replicate that network. It is not just about VIE as a departure airport...

Blerg wrote:

RvA wrote:

airhansa wrote:

If they do buy OS from LH, I hope that a EU ruling could force IAG to sell AI to LH, thereby creating a competitor to BA in the UK, and a competitor to LH in Germany. The new LH-AI could become a competitor to BA through expansion into the UK, whereas the new BA-OS could become a competitor to LH through expansion into Germany.

The only thing that I would say is that OS is a far stronger brand than BA with a far superior service. I'd rather have the airline stay with LH or fall into the hands of KLM or SAS. KLM or LH would be ideal in expanding to the UK. In fact, I'd rather have both OS and AI fall into the hands of an Asian airline than IAG.

OS is a far stronger brand than BA? In Austria itself maybe but elsewhere it sure as hell is not.

I would say Austrian Airlines is a much stronger brand in eastern Europe and the Balkans, in countries placed between Greece in the south and Poland in the north (Poland included). British Airways isn't really a big player in this area.

As I said in countries BA is not present but OS is this seems likely but any place BA is present alongside OS I cannot see OS having a stronger brand than BA.

Terrier79 wrote:

The Austrian government IMHO massively overestimates their bargaining position.

I doubt that the Austrian government overestimates their bargaining position (at least not to a high degree)

Mind you LH is facing a somewhat similar situation with SN in BRU. LH demands government money but the Belgian government is going to tie it to certain conditions LH is not willing accept.
Even the German government has made it clear federal money will be given to LH only if they accept the government seats in the board of directors (and LH is really strongly opposing that demand ...)

So, LH is not in such a great bargaining position either ...

How come no one is mentioning Qatar Airways? They hold a 25% stake at IAG, and I find it strange that IAG could be in any serious discussion with Etihad Airways without Qatar involvement.

I believe that Etihad and Qatar Airways must have been sorting out their mutual affairs before any significant investments on either part. Etihad may be in the dire financial state, but Abu Dhabi is still a very wealthy place on Earth. Qatar may be politically isolated but still has an influential sovereign fund.

They could have afforded to burn money and then walk away when oil prices allowed for that. The situation has changed. We saw how quickly Qatar dropped Air Italy and Etihad everyone else except Air Serbia (and that is because they don't have any losses here, the state of Serbia is covering everything, EY influence remained as a token presence and the FF program, nothing more)

Somehow I have a feeling that Vienna will wait. The collapse of a major national carrier in the EU will ring a bell (be it Austrian, Virgin, or any other) and will make everyone else run for covers and become "more affordable and accessible for discussion."

Why is this Etihad rumor sticking around in this aviation group ? All of you should know that EY as an investor could only be involved in a possible OS 2.0 with a maximum 49% share in order to not loose traffic rights as an EU airline ...

As mentioned above, since QR is a shareholder of IAG, any combination of IAG + EY is a no-brainer ! And I seriously don’t see any other EU airline (group) being able to invest in whatever scenario of OS 2.0, holding the required 51% to make a possible EY partnership happen.

davidjohnson6 wrote:

I'm wondering if IAG are looking at a poisoned chalice in the shape of Vienna. The country's economy is deeply tied to Germany, and it doesn't have the Asian long haul location advantage that Helsinki has. If Austrian wereto leave LH and be sold to IAG, I imagine LH would significantly increase routes to Eastern Europe from Munich. Furthermore, Wizz have the advantage over Austrian for routes to Eastern Europe - nonstop on a LCC always beats changing planes with a token meal at a high price.

I first wondered if IAG is right. Your post disilusioned me.
UK-Asia is pointless via Vienna. Spain-Asia is better via Arabian Gulf.
What are the economic ties? Does Spain to Eastern Europe traffic justify to send a small plane from a medium Spanish city to Vienna?
Very strong point that Lufthansa would increase connections from Munich. Could Vienna compete to medium Spanish cities for connections to Eastern Europe?

Poland has a lot of population. Otherwise not much population east of Germany. Austria has only nine million population, Hungary ten million. Business and discreationary spending in eastern Europe is also not so high. These are not conditions that call for a hub, especially not with Munich 192 nm away.

Including a Vienna hub would open a lot more two stop connections if A321 shuttle between Madrid, London and Vienna.
Maybe IAG got a special offer for 50 E2 jets?
Is Vienna airport known to be cheap to operate to?

Sokes wrote:

davidjohnson6 wrote:

I'm wondering if IAG are looking at a poisoned chalice in the shape of Vienna. The country's economy is deeply tied to Germany, and it doesn't have the Asian long haul location advantage that Helsinki has. If Austrian wereto leave LH and be sold to IAG, I imagine LH would significantly increase routes to Eastern Europe from Munich. Furthermore, Wizz have the advantage over Austrian for routes to Eastern Europe - nonstop on a LCC always beats changing planes with a token meal at a high price.

I first wondered if IAG is right. Your post disilusioned me.
UK-Asia is pointless via Vienna. Spain-Asia is better via Arabian Gulf.
What are the economic ties? Does Spain to Eastern Europe traffic justify to send a small plane from a medium Spanish city to Vienna?
Very strong point that Lufthansa would increase connections from Munich. Could Vienna compete to medium Spanish cities for connections to Eastern Europe?

Poland has a lot of population. Otherwise not much population east of Germany. Austria has only nine million population, Hungary ten million. Business and discreationary spending in eastern Europe is also not so high. These are not conditions that call for a hub, especially not with Munich 192 nm away.

Including a Vienna hub would open a lot more two stop connections if A321 shuttle between Madrid, London and Vienna.
Maybe IAG got a special offer for 50 E2 jets?
Is Vienna airport known to be cheap to operate to?

Vienna as a hub has a fantastic location, unfortunately for them so does Munich. However, Balkan peninsula with its 55-60 million people (Turkey excluded) is a relatively large market as there is a massive diaspora on the other end. Austria has massive investments in that region so there is quite a bit of business traffic. Unfortunately Vienna's biggest problem are its costs as this is a rather price sensitive market. This is where airlines such as JU and LO profit massively.

Beyond the Balkans you have the rest of eastern Europe like Poland, The Czech Republic, Ukraine, Hungary...

The market and potential is there. Like I wrote earlier, the most unfortunate thing for Vienna is the slow and gradual rise of Munich as a transfer hub. Whoever deals with OS will have to address the issue of high costs. At this point this is not only important because of transfers but because of LCCs that are going absolutely wild over there.

Blerg wrote:

Balkan peninsula with its 55-60 million people (Turkey excluded) is a relatively large market as there is a massive diaspora on the other end. Austria has massive investments in that region so there is quite a bit of business traffic.

Interesting. I didn't knew.
I remembered from childhood that Austria has around seven million people. I had a feeling that there must have been massive integration when google told nine million.
It reminds me of a discussion about Air Baltic. There also my ignorance got exposed. Same topic, immigration.

Blerg wrote:

Whoever deals with OS will have to address the issue of high costs. At this point this is not only important because of transfers but because of LCCs that are going absolutely wild over there.

I don't understand your last sentence.
From the Air Baltic discussion I would guess that immigrants don't mind a frequency of twice a week, provided they get cheap direct tickets.

Sokes wrote:

Blerg wrote:

Balkan peninsula with its 55-60 million people (Turkey excluded) is a relatively large market as there is a massive diaspora on the other end. Austria has massive investments in that region so there is quite a bit of business traffic.

Interesting. I didn't knew.
I remembered from childhood that Austria has around seven million people. I had a feeling that there must have been massive integration when google told nine million.

Blerg wrote:

Whoever deals with OS will have to address the issue of high costs. At this point this is not only important because of transfers but because of LCCs that are going absolutely wild over there.

I don't understand your last sentence.

Well, in the past (roughly from 1992 to 2018) Austrian Airlines dominated eastern Europe while enjoying limited LCC competition at its home market. This made their life much easier as they could have charged higher yields on both fronts. Over time airlines such as Turkish Airlines, LOT, Aegean and Air Serbia started taking away part of their customers putting extra pressure on their yields. Even with this they still had Vienna, a wealthy medium sized European market, to rely upon. Since a few years ago they lost this as well once Lauda and Wizz Air moved in. Now they need to face fierce competition both for locals in Vienna and for transfers. How can OS compete with airlines such as LO, JU or TK whose basic costs are much lower?

Until costs are addressed OS will keep on suffering as circumstances have changed over the past five to ten years.

VIE used to be served by dozens of carriers in the past which aren’t present anymore, let’s just take DL or SQ (747 service) as examples. NH used to send 747s from Tokyo, and so on. It all stopped gradually about 10-20 years ago, but it was there and showed that demand IS there. Vienna is HQ to a lot of places, has an UNO-HQ, is home to IAEA, the world‘s number two Congress city, the second biggest German speaking city, home to a lot of Pharma companies, just continue this on your own. The major issue over the past years was that LH simply didn’t want to build up a competitor to LH itself so close to their home market, keep in mind that LH partly owns a MUC Terminal, those costs have to be earned somehow so passengers tend to be routed through FRA and MUC instead of VIE. On the other hand, they kept telling OS „to improve your numbers” before they’d invest into a new fleet for them. LX or LH got brand new Airbus A220/320neo, OS last year received their first A320 with sharklets.... up to ten A320s, all used, to replace 18 Dash 8 airplanes. Two used 777s, both over 10 years old, while LH took delivery of their A350s and LX received brand new 773s.

OS had been kept on the leash all the time hence the huge flood of LCC taking advantage of the market in Vienna which OS due to it’s leash couldn’t.

Therefore a OS 2.0 with e.g. IAG could theoretically become a success story. Just my 2c

Blerg wrote:

How can OS compete with airlines such as LO, JU or TK whose basic costs are much lower?

I leave that question to be answered by Emirates critics.

OS is a full service high quality airline IMO, offering a better product that BA or Iberia. I'm not quite sure why they would focus on shuttling people between EE and WE.

AMS for example is in a good position to act as a hub for the wealthy and isolated areas of Northern Europe and the eastern Atlantic Ocean (distance from Stockholm to Madrid is greater than from Athens to London).

Eurowings is closing its Munich operations, so maybe bringing that company over to VIE might work?

Concerning immigration I created a new topic in non-aviation:
viewtopic.php?f=11&t=1445957

lowwkjax wrote:

VIE used to be served by dozens of carriers in the past which aren’t present anymore, let’s just take DL or SQ (747 service) as examples. NH used to send 747s from Tokyo, and so on. It all stopped gradually about 10-20 years ago, but it was there and showed that demand IS there. Vienna is HQ to a lot of places, has an UNO-HQ, is home to IAEA, the world‘s number two Congress city, the second biggest German speaking city, home to a lot of Pharma companies, just continue this on your own. The major issue over the past years was that LH simply didn’t want to build up a competitor to LH itself so close to their home market, keep in mind that LH partly owns a MUC Terminal, those costs have to be earned somehow so passengers tend to be routed through FRA and MUC instead of VIE. On the other hand, they kept telling OS „to improve your numbers” before they’d invest into a new fleet for them. LX or LH got brand new Airbus A220/320neo, OS last year received their first A320 with sharklets.... up to ten A320s, all used, to replace 18 Dash 8 airplanes. Two used 777s, both over 10 years old, while LH took delivery of their A350s and LX received brand new 773s.

OS had been kept on the leash all the time hence the huge flood of LCC taking advantage of the market in Vienna which OS due to it’s leash couldn’t.

Therefore a OS 2.0 with e.g. IAG could theoretically become a success story. Just my 2c

I don't know if this is true or if I am tripping but over the past year, year and a half when I go online to look for flights on lh.com, more often than not, it only shows Lufthansa flights and very rarely LX ones. Austrian is usually there but you have to expand the list of options to see it. The other day I was looking at flights to ORD for this summer, and they even seem to have limited options on United. Seems like LH is giving priority to their own despite also owning LX and OS.

airhansa wrote:

OS is a full service high quality airline IMO, offering a better product that BA or Iberia. I'm not quite sure why they would focus on shuttling people between EE and WE.

AMS for example is in a good position to act as a hub for the wealthy and isolated areas of Northern Europe and the eastern Atlantic Ocean (distance from Stockholm to Madrid is greater than from Athens to London).

Eurowings is closing its Munich operations, so maybe bringing that company over to VIE might work?

Just because someone is better than BA or IB doesn't make them a high quality airline, but you are totally entitled to your opinion. Being a fairly frequent OS flyer (10 times last year), the only good thing I have to say about them is that there long haul J is passable. I think that everything else about them basically sucks. VIE is a bad airport (from a passenger standpoint), the onboard service in Europe is mediocre, and the whole brand just feels....cheap. I would much rather see OS ops closed and the company folded into LH. They are definitely the weakest link in the LH Group, imo.

InnsbruckFlyer wrote:

airhansa wrote:

OS is a full service high quality airline IMO, offering a better product that BA or Iberia. I'm not quite sure why they would focus on shuttling people between EE and WE.

AMS for example is in a good position to act as a hub for the wealthy and isolated areas of Northern Europe and the eastern Atlantic Ocean (distance from Stockholm to Madrid is greater than from Athens to London).

Eurowings is closing its Munich operations, so maybe bringing that company over to VIE might work?

Just because someone is better than BA or IB doesn't make them a high quality airline, but you are totally entitled to your opinion. Being a fairly frequent OS flyer (10 times last year), the only good thing I have to say about them is that there long haul J is passable. I think that everything else about them basically sucks. VIE is a bad airport (from a passenger standpoint), the onboard service in Europe is mediocre, and the whole brand just feels....cheap. I would much rather see OS ops closed and the company folded into LH. They are definitely the weakest link in the LH Group, imo.

I'm not too sure on the differences between LH and OS, but I usually place them at a similar level, along with the likes of KLM, SAS and Finnair. The point is that the likes of BA, IB, AZ etc... offer worse products in comparison and that Austria would lose out by selling to IAG. Hence I'd be against selling to IAG.

I am also a fan of merging the entire Lufthansa brand into one entity. But I can see a future for Eurowings being based in Vienna and I don't think that Eurowings should be merged into Lufthansa.

tl;dr I agree with your view.

airhansa wrote:

InnsbruckFlyer wrote:

airhansa wrote:

OS is a full service high quality airline IMO, offering a better product that BA or Iberia. I'm not quite sure why they would focus on shuttling people between EE and WE.

AMS for example is in a good position to act as a hub for the wealthy and isolated areas of Northern Europe and the eastern Atlantic Ocean (distance from Stockholm to Madrid is greater than from Athens to London).

Eurowings is closing its Munich operations, so maybe bringing that company over to VIE might work?

Just because someone is better than BA or IB doesn't make them a high quality airline, but you are totally entitled to your opinion. Being a fairly frequent OS flyer (10 times last year), the only good thing I have to say about them is that there long haul J is passable. I think that everything else about them basically sucks. VIE is a bad airport (from a passenger standpoint), the onboard service in Europe is mediocre, and the whole brand just feels....cheap. I would much rather see OS ops closed and the company folded into LH. They are definitely the weakest link in the LH Group, imo.

I'm not too sure on the differences between LH and OS, but I usually place them at a similar level, along with the likes of KLM, SAS and Finnair. The point is that the likes of BA, IB, AZ etc... offer worse products in comparison and that Austria would lose out by selling to IAG. Hence I'd be against selling to IAG.

I am also a fan of merging the entire Lufthansa brand into one entity. But I can see a future for Eurowings being based in Vienna and I don't think that Eurowings should be merged into Lufthansa.

tl;dr I agree with your view.

All of that makes sense, but OS will remain in LH’s shadow and will not ever be more than it is now.

IAG and oneworld have been looking for a partner in Central Europe for a long time. Even if Austrian’s product is dumbed down to IAG standards, the potential for profitability and growth at the VIE hub to be a contender to other primary European hubs would make it worth it, no?

At the end of the day I think the Austrian government would rather keep OS as part of LH Group than to sell them off to IAG or Etihad. It's obvious the government in Vienna wants to use this opportunity to get their hands on LH Group. They mentioned this as a potential outcome several times now. Austrian Airlines is lucky that Prague and Budapest collapsed as hubs some years ago otherwise it would be a very crowded space right now. It also helps that Ukraine International is slowly sinking leaving them with LOT and Aegean east of their hub as competitors of similar size going after the same market as they do.

InnsbruckFlyer wrote:

airhansa wrote:

OS is a full service high quality airline IMO, offering a better product that BA or Iberia. I'm not quite sure why they would focus on shuttling people between EE and WE.

AMS for example is in a good position to act as a hub for the wealthy and isolated areas of Northern Europe and the eastern Atlantic Ocean (distance from Stockholm to Madrid is greater than from Athens to London).

Eurowings is closing its Munich operations, so maybe bringing that company over to VIE might work?

Just because someone is better than BA or IB doesn't make them a high quality airline, but you are totally entitled to your opinion. Being a fairly frequent OS flyer (10 times last year), the only good thing I have to say about them is that there long haul J is passable. I think that everything else about them basically sucks. VIE is a bad airport (from a passenger standpoint), the onboard service in Europe is mediocre, and the whole brand just feels....cheap. I would much rather see OS ops closed and the company folded into LH. They are definitely the weakest link in the LH Group, imo.

Well said. I really don't understand the flag waving for OS on this feed. It's a distinctly average airline, average product, far behind LH or LX in its group and VIE as a hub is a terrible airport. LH management have been right to put the screw on it, i.e. no investment until its turned around.

I'd agree its probably in better hands with the LH group as the quad hub mechanism between FRA, MUC, ZRH and VIE works well for multiple long haul departures, and LH and LX product is decent, so improving it to same standard would be ideal. However, what you could say is if IAG got their hands on it, it would give OS management the slap they need to move forward and turn it around, whether you like the end product or not. Something LH group have seemingly been unable to do so far. Austrian government would need to have a real think of what they really want as it hasn't been working as well as it should.

timboflier215 wrote:

IAG and Etihad have said they can be an ALTERNATIVE to OS should it collapse (by expanding Level in VIE in the case of IAG). They did not say they would take over OS so most of the posts in this thread are worthless...

So what will happen to OS then?

jodieellis wrote:

timboflier215 wrote:

IAG and Etihad have said they can be an ALTERNATIVE to OS should it collapse (by expanding Level in VIE in the case of IAG). They did not say they would take over OS so most of the posts in this thread are worthless...

So what will happen to OS then?

AUA is preparing for alternative scenarios - i.e. orderly insolvency, if agreement cannot be reached by 18 May.
Austria government would not bailout OS without meaningful concession from LH, OS is after all a German company. But they too are working for alternative scenarios, this is how IAG came into play, they approached Austria with a plan for an IAG-built VIE hub, not so likely to happen though.

Blerg wrote:

At the end of the day I think the Austrian government would rather keep OS as part of LH Group than to sell them off to IAG or Etihad. It's obvious the government in Vienna wants to use this opportunity to get their hands on LH Group. They mentioned this as a potential outcome several times now. Austrian Airlines is lucky that Prague and Budapest collapsed as hubs some years ago otherwise it would be a very crowded space right now. It also helps that Ukraine International is slowly sinking leaving them with LOT and Aegean east of their hub as competitors of similar size going after the same market as they do.

Austrian government has no say whatsoever in 'selling OS off to anyone'. Neither is IAG interested in OS, what they are interested is Vienna market.

Germany is by far the largest and most important market for Austrian airlines, I don't see how an airline based in Prague or Budapest could steal corporate flying between VIE and FRA/MUC/DUS/BER/HAM, or ZRH/LHR/CDG/MXP/CPH for that matter. Austrian airlines has only a moderate small long haul flying and the money is not made from cheap economy transfers to Ukraine/ Poland or some Balkan countries, they do play a role in filling back seats but they are certainly not the core of the long haul flying which ÖVP wants to keep. Vienna itself is a sizeable wealthy market and that's what attracts IAG.

GLANKG wrote:

Blerg wrote:

At the end of the day I think the Austrian government would rather keep OS as part of LH Group than to sell them off to IAG or Etihad. It's obvious the government in Vienna wants to use this opportunity to get their hands on LH Group. They mentioned this as a potential outcome several times now. Austrian Airlines is lucky that Prague and Budapest collapsed as hubs some years ago otherwise it would be a very crowded space right now. It also helps that Ukraine International is slowly sinking leaving them with LOT and Aegean east of their hub as competitors of similar size going after the same market as they do.

Austrian government has no say whatsoever in 'selling OS off to anyone'. Neither is IAG interested in OS, what they are interested is Vienna market.

Germany is by far the largest and most important market for Austrian airlines, I don't see how an airline based in Prague or Budapest could steal corporate flying between VIE and FRA/MUC/DUS/BER/HAM, or ZRH/LHR/CDG/MXP/CPH for that matter. Austrian airlines has only a moderate small long haul flying and the money is not made from cheap economy transfers to Ukraine/ Poland or some Balkan countries, they do play a role in filling back seats but they are certainly not the core of the long haul flying which ÖVP wants to keep. Vienna itself is a sizeable wealthy market and that's what attracts IAG.

Nonsense, they have a say as long as LH Group is asking for millions from Austrian taxpayers.

Blerg wrote:

GLANKG wrote:

Blerg wrote:

At the end of the day I think the Austrian government would rather keep OS as part of LH Group than to sell them off to IAG or Etihad. It's obvious the government in Vienna wants to use this opportunity to get their hands on LH Group. They mentioned this as a potential outcome several times now. Austrian Airlines is lucky that Prague and Budapest collapsed as hubs some years ago otherwise it would be a very crowded space right now. It also helps that Ukraine International is slowly sinking leaving them with LOT and Aegean east of their hub as competitors of similar size going after the same market as they do.

Austrian government has no say whatsoever in 'selling OS off to anyone'. Neither is IAG interested in OS, what they are interested is Vienna market.

Germany is by far the largest and most important market for Austrian airlines, I don't see how an airline based in Prague or Budapest could steal corporate flying between VIE and FRA/MUC/DUS/BER/HAM, or ZRH/LHR/CDG/MXP/CPH for that matter. Austrian airlines has only a moderate small long haul flying and the money is not made from cheap economy transfers to Ukraine/ Poland or some Balkan countries, they do play a role in filling back seats but they are certainly not the core of the long haul flying which ÖVP wants to keep. Vienna itself is a sizeable wealthy market and that's what attracts IAG.

Nonsense, they have a say as long as LH Group is asking for millions from Austrian taxpayers.

What nonsense are you on about? You think Austrian government can force LH to sell OS to IAG? They can either reach agreement and bailout OS, or not doing nothing and that's about it. What would LH do in that case it entirely out of Kurz's power.

GLANKG wrote:

Blerg wrote:

GLANKG wrote:

Austrian government has no say whatsoever in 'selling OS off to anyone'. Neither is IAG interested in OS, what they are interested is Vienna market.

Germany is by far the largest and most important market for Austrian airlines, I don't see how an airline based in Prague or Budapest could steal corporate flying between VIE and FRA/MUC/DUS/BER/HAM, or ZRH/LHR/CDG/MXP/CPH for that matter. Austrian airlines has only a moderate small long haul flying and the money is not made from cheap economy transfers to Ukraine/ Poland or some Balkan countries, they do play a role in filling back seats but they are certainly not the core of the long haul flying which ÖVP wants to keep. Vienna itself is a sizeable wealthy market and that's what attracts IAG.

Nonsense, they have a say as long as LH Group is asking for millions from Austrian taxpayers.

What nonsense are you on about? You think Austrian government can force LH to sell OS to IAG? They can either reach agreement and bailout OS, or not doing nothing and that's about it. What would LH do in that case it entirely out of Kurz's power.

No it's not because LH needs Austrian government's guarantees to keep OS alive. Without that they are as a good as dead. If they do not meet the requirements of the Austrian government then a new solution can be found and that is to sell LH's business in Austria to someone else. There is a reason why Spohr met with the Austrian government about a week or so ago.

Blerg wrote:

GLANKG wrote:

Austrian government has no say whatsoever in 'selling OS off to anyone'. Neither is IAG interested in OS, what they are interested is Vienna market.

Germany is by far the largest and most important market for Austrian airlines, I don't see how an airline based in Prague or Budapest could steal corporate flying between VIE and FRA/MUC/DUS/BER/HAM, or ZRH/LHR/CDG/MXP/CPH for that matter. Austrian airlines has only a moderate small long haul flying and the money is not made from cheap economy transfers to Ukraine/ Poland or some Balkan countries, they do play a role in filling back seats but they are certainly not the core of the long haul flying which ÖVP wants to keep. Vienna itself is a sizeable wealthy market and that's what attracts IAG.

Nonsense, they have a say as long as LH Group is asking for millions from Austrian taxpayers.

The Austrian government can set conditions for Austrian Airlines, but not for the LH Group. The LH Group owns the airline is is not required to give a national government a seat on the board or any other guarantee for the future. It can close down the airline, take the assets back to the LH Group and let Austrian go bankrupt. Only assets tied to Austrian will remain, but will be sold to a bidder during insolvency procedures. If the Austrian government didn't want to be in this situation, it should have bought shares in LH Group, which the French (and later Dutch) government did at AF/KL. Only then you're entitled to a seat on the Board. Moreover, when there is a surplus in LH Group and the added value of a subsidiary doesn't outweigh its costs, closing it down makes sense. AFAIK IAG requires all of its airlines to meet their ROI targets (or have an putlook to meet them near term) in order to remain in the group, LH and AF/KL are looking less to the monetary side of the airline but also look strategically. OS has been performing not that well (low profitability margin) for years now and I wonder if they meet their ROI targets in the LH Group.

Blerg wrote:

GLANKG wrote:

Blerg wrote:

Nonsense, they have a say as long as LH Group is asking for millions from Austrian taxpayers.

What nonsense are you on about? You think Austrian government can force LH to sell OS to IAG? They can either reach agreement and bailout OS, or not doing nothing and that's about it. What would LH do in that case it entirely out of Kurz's power.

No it's not because LH needs Austrian government's guarantees to keep OS alive. Without that they are as a good as dead. If they do not meet the requirements of the Austrian government then a new solution can be found and that is to sell LH's business in Austria to someone else. There is a reason why Spohr met with the Austrian government about a week or so ago.

Very wishful thinking. In theory LH could choose to sell OS at any time. In reality OS is being planned to go into orderly insolvency (Geordnete Insolvenz) and restructure in the event of no bailout, so LH ain't go away. Like it or not LH simply won't give up any DACH home market (quota in https://www.derstandard.at/story/200011 ... hs?ref=rec). In short, Austrian government cannot force LH into selling OS, with or without bailout.

GLANKG wrote:

Blerg wrote:

GLANKG wrote:

What nonsense are you on about? You think Austrian government can force LH to sell OS to IAG? They can either reach agreement and bailout OS, or not doing nothing and that's about it. What would LH do in that case it entirely out of Kurz's power.

No it's not because LH needs Austrian government's guarantees to keep OS alive. Without that they are as a good as dead. If they do not meet the requirements of the Austrian government then a new solution can be found and that is to sell LH's business in Austria to someone else. There is a reason why Spohr met with the Austrian government about a week or so ago.

Very wishful thinking. In theory LH could choose to sell OS at any time. In reality OS is being planned to go into orderly insolvency (Geordnete Insolvenz) and restructure in the event of no bailout, so LH ain't go away. Like it or not LH simply won't give up any DACH home market (quota in https://www.derstandard.at/story/200011 ... hs?ref=rec). In short, Austrian government cannot force LH into selling OS, with or without bailout.

Wishful thinking on your behalf as well if you think that going into insolvency won't bring about a new set of problems for OS. At the end of the day, OS is running out of time and soon they will need those funds in order to survive. Then there is another question, will OS have enough funds to make it through the upcoming winter season? Will they require another round of state aid? There is also the possibility of renationalization in case LH brings the airline to the brink of bankruptcy.

LJ wrote:

Blerg wrote:

GLANKG wrote:

Austrian government has no say whatsoever in 'selling OS off to anyone'. Neither is IAG interested in OS, what they are interested is Vienna market.

Germany is by far the largest and most important market for Austrian airlines, I don't see how an airline based in Prague or Budapest could steal corporate flying between VIE and FRA/MUC/DUS/BER/HAM, or ZRH/LHR/CDG/MXP/CPH for that matter. Austrian airlines has only a moderate small long haul flying and the money is not made from cheap economy transfers to Ukraine/ Poland or some Balkan countries, they do play a role in filling back seats but they are certainly not the core of the long haul flying which ÖVP wants to keep. Vienna itself is a sizeable wealthy market and that's what attracts IAG.

Nonsense, they have a say as long as LH Group is asking for millions from Austrian taxpayers.

The Austrian government can set conditions for Austrian Airlines, but not for the LH Group. The LH Group owns the airline is is not required to give a national government a seat on the board or any other guarantee for the future. It can close down the airline, take the assets back to the LH Group and let Austrian go bankrupt. Only assets tied to Austrian will remain, but will be sold to a bidder during insolvency procedures. If the Austrian government didn't want to be in this situation, it should have bought shares in LH Group, which the French (and later Dutch) government did at AF/KL. Only then you're entitled to a seat on the Board. Moreover, when there is a surplus in LH Group and the added value of a subsidiary doesn't outweigh its costs, closing it down makes sense. AFAIK IAG requires all of its airlines to meet their ROI targets (or have an putlook to meet them near term) in order to remain in the group, LH and AF/KL are looking less to the monetary side of the airline but also look strategically. OS has been performing not that well (low profitability margin) for years now and I wonder if they meet their ROI targets in the LH Group.

Austrian government isn't concerned about what happens in Germany, they are trying to influence LH Group as far as Austria and OS go. That is why Kurz mentioned investing, that is buying shares in LH Group. In such a way they could have a direct say when it comes to Austria. This would make sense as right now all decision regarding VIE and OS are taken in a foreign country.

Blerg wrote:

GLANKG wrote:

Blerg wrote:

No it's not because LH needs Austrian government's guarantees to keep OS alive. Without that they are as a good as dead. If they do not meet the requirements of the Austrian government then a new solution can be found and that is to sell LH's business in Austria to someone else. There is a reason why Spohr met with the Austrian government about a week or so ago.

Very wishful thinking. In theory LH could choose to sell OS at any time. In reality OS is being planned to go into orderly insolvency (Geordnete Insolvenz) and restructure in the event of no bailout, so LH ain't go away. Like it or not LH simply won't give up any DACH home market (quota in https://www.derstandard.at/story/200011 ... hs?ref=rec). In short, Austrian government cannot force LH into selling OS, with or without bailout.

Wishful thinking on your behalf as well if you think that going into insolvency won't bring about a new set of problems for OS. At the end of the day, OS is running out of time and soon they will need those funds in order to survive. Then there is another question, will OS have enough funds to make it through the upcoming winter season? Will they require another round of state aid? There is also the possibility of renationalization in case LH brings the airline to the brink of bankruptcy.

There are many companies came back stronger after orderly insolvency aren't they? I am not gonna discuss whether OS's program is gonna work or not because nothing has been agreed or decided yet, and so much uncertainty that I don't even know when could LH restore 80% schedule. My point still being - it is entirely up to LH to decide what to do with OS in the event of no bailout, and they have been very clearly, you are not listening.

P.S. I haven't read any appetite for nationalisation from major political parties.

GLANKG wrote:

Blerg wrote:

GLANKG wrote:

Very wishful thinking. In theory LH could choose to sell OS at any time. In reality OS is being planned to go into orderly insolvency (Geordnete Insolvenz) and restructure in the event of no bailout, so LH ain't go away. Like it or not LH simply won't give up any DACH home market (quota in https://www.derstandard.at/story/200011 ... hs?ref=rec). In short, Austrian government cannot force LH into selling OS, with or without bailout.

Wishful thinking on your behalf as well if you think that going into insolvency won't bring about a new set of problems for OS. At the end of the day, OS is running out of time and soon they will need those funds in order to survive. Then there is another question, will OS have enough funds to make it through the upcoming winter season? Will they require another round of state aid? There is also the possibility of renationalization in case LH brings the airline to the brink of bankruptcy.

There are many companies came back stronger after orderly insolvency aren't they? I am not gonna discuss whether OS's program is gonna work or not because nothing has been agreed or decided yet, and so much uncertainty that I don't even know when could LH restore 80% schedule. My point still being - it is entirely up to LH to decide what to do with OS in the event of no bailout, and they have been very clearly, you are not listening.

P.S. I haven't read any appetite for nationalisation from major political parties.

You are insisting on certain things being definite which is not the case. Many things have and will change in the coming weeks especially as politics are getting more and more involved in Germany's aid to Lufthansa. I am listening and reading all that's going on and from that I understood that nothing is final until signatures have dried on the document that will be signed by these parties. You think the Austrian government has no say in OS' future while I think that's wrong especially since Spohr has met with Kurz and his government where he was served with a list of requirements he did not turn down.

Blerg wrote:

GLANKG wrote:

Blerg wrote:

Wishful thinking on your behalf as well if you think that going into insolvency won't bring about a new set of problems for OS. At the end of the day, OS is running out of time and soon they will need those funds in order to survive. Then there is another question, will OS have enough funds to make it through the upcoming winter season? Will they require another round of state aid? There is also the possibility of renationalization in case LH brings the airline to the brink of bankruptcy.

There are many companies came back stronger after orderly insolvency aren't they? I am not gonna discuss whether OS's program is gonna work or not because nothing has been agreed or decided yet, and so much uncertainty that I don't even know when could LH restore 80% schedule. My point still being - it is entirely up to LH to decide what to do with OS in the event of no bailout, and they have been very clearly, you are not listening.

P.S. I haven't read any appetite for nationalisation from major political parties.

You are insisting on certain things being definite which is not the case. Many things have and will change in the coming weeks especially as politics are getting more and more involved in Germany's aid to Lufthansa. I am listening and reading all that's going on and from that I understood that nothing is final until signatures have dried on the document that will be signed by these parties. You think the Austrian government has no say in OS' future while I think that's wrong especially since Spohr has met with Kurz and his government where he was served with a list of requirements he did not turn down.

I said 'Austrian government cannot force LH selling OS' as you suggested! Don't put words into my mouth.

Blerg wrote:

Austrian government isn't concerned about what happens in Germany, they are trying to influence LH Group as far as Austria and OS go. That is why Kurz mentioned investing, that is buying shares in LH Group. In such a way they could have a direct say when it comes to Austria. This would make sense as right now all decision regarding VIE and OS are taken in a foreign country.

If you want to have any influence you need to buy for at least EUR500mn in LH Group stock (which will get you around 15%). If you really want some influence you've to buy for at least EUR1bn of LH Group stock. I sincerly wonder if this is something the Austrian taxpayers will agree to and see as a worthwhile investment given the current crisis. The current shareholders will be pleased though.

Blerg wrote:

GLANKG wrote:

Blerg wrote:

Nonsense, they have a say as long as LH Group is asking for millions from Austrian taxpayers.

What nonsense are you on about? You think Austrian government can force LH to sell OS to IAG? They can either reach agreement and bailout OS, or not doing nothing and that's about it. What would LH do in that case it entirely out of Kurz's power.

No it's not because LH needs Austrian government's guarantees to keep OS alive. Without that they are as a good as dead. If they do not meet the requirements of the Austrian government then a new solution can be found and that is to sell LH's business in Austria to someone else. There is a reason why Spohr met with the Austrian government about a week or so ago.

LH has kept OS alive in the recent years, prefers to continue its Austrian engagement and has asked for state support to get through the crisis. Now the Austrian government seems to dictate conditions that LH cannot or at least does not want to accept.

The Austrian government is overplaying their cards. That’s still my opinion.

Keeping OS alive in the current setup is not the only option on the table. OS could face a severe haircut if the negotiations can’t be brought to end successfully. Longhaul from Vienna is not God given. A „new Austrian“ could eventually just connect Austria to the LH hubs and maybe the most important European business destinations and P2P could just be left to others given the battlefield Vienna is. This would result in a massively smaller Austrian and is exactly what the government wants to avoid. But they should take this scenario serious.

An orderly insolvency is now definitely also an option that is on the table. I agree that an insolvency creates new problems, but they have reached a stage now where the disadvantages accepting the harsh conditions of the Austrian government might outweigh the disadvantages of an insolvency and where it might be better to stop this disaster and press the reset button.

GLANKG wrote:

Blerg wrote:

GLANKG wrote:

There are many companies came back stronger after orderly insolvency aren't they? I am not gonna discuss whether OS's program is gonna work or not because nothing has been agreed or decided yet, and so much uncertainty that I don't even know when could LH restore 80% schedule. My point still being - it is entirely up to LH to decide what to do with OS in the event of no bailout, and they have been very clearly, you are not listening.

P.S. I haven't read any appetite for nationalisation from major political parties.

You are insisting on certain things being definite which is not the case. Many things have and will change in the coming weeks especially as politics are getting more and more involved in Germany's aid to Lufthansa. I am listening and reading all that's going on and from that I understood that nothing is final until signatures have dried on the document that will be signed by these parties. You think the Austrian government has no say in OS' future while I think that's wrong especially since Spohr has met with Kurz and his government where he was served with a list of requirements he did not turn down.

I said 'Austrian government cannot force LH selling OS' as you suggested! Don't put words into my mouth.

Only time will tell who was right and who wasn't.

LJ wrote:

If you want to have any influence you need to buy for at least EUR500mn in LH Group stock (which will get you around 15%). If you really want some influence you've to buy for at least EUR1bn of LH Group stock. I sincerly wonder if this is something the Austrian taxpayers will agree to and see as a worthwhile investment given the current crisis. The current shareholders will be pleased though.

Austria cannot just buy 15% or more of LH on the stock market. They would immediately be forced to sell these stakes again due to German laws regarding foreign ownership of Airlines.
Austria can only gain some control over LH with the consent of LH and Germany e.g. through a foundation based in Germany, which will not happen.

ÖVP wants 267m for 7% stake. SPÖ insisted on taking stakes and now pushing for blocking minority. (Green wants carbon emissions cut.)

But actually Kurz didn't really insist on stake control in definite, what he said in definite is Austria won't bailout with nothing in return. Talks are on going and renewing fleet is mentioned as an alternative.

Terrier79 wrote:

LJ wrote:

If you want to have any influence you need to buy for at least EUR500mn in LH Group stock (which will get you around 15%). If you really want some influence you've to buy for at least EUR1bn of LH Group stock. I sincerly wonder if this is something the Austrian taxpayers will agree to and see as a worthwhile investment given the current crisis. The current shareholders will be pleased though.

Austria cannot just buy 15% or more of LH on the stock market. They would immediately be forced to sell these stakes again due to German laws regarding foreign ownership of Airlines.
Austria can only gain some control over LH with the consent of LH and Germany e.g. through a foundation based in Germany, which will not happen.

AFAIK no EU member state can restrict the purchase of stock in an EU company when the buyer is an EU resident (if not it would trigger a court case at the ECJ whether German law is in line with EU law). Issues regarding traffic rights will only be an issue when the shares are majority controlled by a non-resident, though in case of LH Group the investment is not in the airline but in the overall Group (and I reckon LH Group would be smart to have ensured its German traffic rights for LH and EW by structuring it in such a way that both EW and LH are meeting the requirements to be German from a traffic rights point of view).