RELIABILITY FOR THE SUMMER TRAVEL SEASON
Austrian Airlines CEO Jaan Albrecht talks to Connoisseur Circle about the enormously important summer peak season for the domestic airline.
According to the Advocate General of the European Court of Justice, whose opinion was published on Tuesday, the old collective agreement for Austrian's flying personnel is still valid. What happens now?
ALBRECHT: The case will now go to the ECJ panel of judges and then back to the courts in Austria. We don't expect a decision before 2015. In the summer, we will concentrate on the customer and
the business. Our priority is therefore to guarantee reliable flight operations in addition to our tried-and-tested service. We have indications that we are doing well this summer. Bookings are good.
Why is it so difficult for some professional groups, such as pilots, to necessarily adapt service contracts to a massively changing aviation industry?
ALBRECHT. Because it is precisely this change that is difficult. After all, the employees are directly affected. The business model of flying is different today than it was 15 years ago. Today, the market share of low-cost airlines in Europe
low-cost airlines is 50 percent. They have a cost structure that we are not yet able to compete with, even though we are doing our homework. In addition, the airlines from the Gulf are a huge challenge. Politicians should also understand that a ticket tax or a ban on night flights eats away at competition. We need a fair playing field.
Has AUA's former strength in east/west traffic outlived its usefulness?
ALBRECHT. East/West is still one of AUA's strategies, but not THE strategy, although historically we still have our strengths there. We have some catching up to do on long-haul routes. And it turns out that we are doing well. The advance bookings for our newest destination Newark give us confidence and we know that there are still a number of destinations in North America that can be served non-stop from Vienna. The same applies to destinations in North-East Asia, which can be a bit of a detour for hubs like Istanbul, such as Hong Kong, Seoul or destinations in China.
destinations in China.
The new change in the industry is the Gulf carriers, said Lufthansa CEO Carsten Spohr at the IATA AGM in Doha. Can Europe's airlines even keep up?
ALBRECHT. I think we have now seen a wave of Bosphorus (Turkish Airlines) and Gulf airlines, which have put the established long haul airlines in Europe under pressure. At the same time, we have invested massively, for example in our product. Politicians need to understand that if we don't all work together
work together, with the airports etc., that our hubs will shift to the east, with the smaller hubs such as Vienna or Milan being the first to be affected. We need a fair playing field that does not harm the location. The massive approach of Gulf carriers to Vienna, for example, is clearly excessive. There are slowly signs that politicians are
that such models are not realistic.
Have the Gulf carriers been underestimated?
ALBRECHT Yes, the speed at which they have spread has been underestimated to a certain extent. But the greater influence is because they are subsidized. How else can you explain that Emirates has ordered 140 Airbus A380s when the rest of the world can't match that number. There is a lack of logic, a sign that the
traffic is being shifted. No Air France or Qantas or Singapore Airlines can manage something like that.
What can AUA do better?
ALBRECHT. Our strength is our favorable cost situation paired with a top product. Above all, we are one of the best within Lufthansa. If we play it right, then we have a good starting position.
One additional long-haul aircraft per year is realistic?
ALBRECHT. Yes, we have proven that with Chicago. But mind you, everything remains a cautious expansion.
Time is pressing for a fleet replacement in the regional jet fleet?
ALBRECHT. We will have to replace the Fokker aircraft in the next three or four years because this aircraft is reaching its design limit. We have discussed with the owner (Lufthansa) whether we need a 100-seater in
the network perspective or whether we can save on this by increasing the productivity of other aircraft. However, we have a condition from Lufthansa that this will only happen if we have a clear legal situation with the pilots. The investment for 22 to 23 aircraft amounts to one billion euros.
Lufthansa, Singapore Airlines etc. are introducing a Premium Economy. A topic for AUA?
ALBRECHT. Not now. We have invested 90 million euros in our product. We are waiting for the initial feedback from Lufthansa Premium Economy and, based on these figures, we will decide whether Austrian also needs to take this step.
Austrian also has to take this step. We want to decide this in 2015.
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