AUA CEO Annette Mann criticized Vienna Airport’s high location costs during the presentation of the company’s results for the third quarter and the first three quarters of this year. The next federal government must take action to secure competitiveness. Within the Lufthansa Group, the domestic airline is particularly affected by the Middle East crisis and the recurring flight cancellations.
“We are generally very satisfied,” said Mann, along with AUA board members Michael Trestl (CCO) and Francesco Sciortino (COO), although they often added a “but.” Mann pointed out that even airlines in Paris have lower costs than in Vienna, with only Munich and Frankfurt being more expensive in Europe. Since 2019, the year before the coronavirus crisis, the costs for a medium-haul flight with an Airbus A320 and 150 passengers at Vienna-Schwechat have risen by 39% to €3,715—this includes air traffic taxes, airport security fees, and air navigation charges.
Only at the major German hubs, Frankfurt (€4,410) and Munich (€4,234), are the costs higher. According to AUA, all other European locations are significantly cheaper—such as Madrid (€660) or Prague (€540). Mann stated, “We expect the next federal government to take a comprehensive look at Austria’s aviation location.” She added, “So we can grow and maintain high connectivity quality as a network airline.” It is also about AUA remaining a “valuable member” of the Lufthansa Group, according to Mann, addressing responsible politics.
Mann emphasized that it is not about passing costs onto the general public. The aviation industry finances its infrastructure “completely independently.” However, the large discrepancies in air traffic taxes are burdensome; Sweden has recognized this and “actively abolished” them. The fact that the tax “flows into the general fund” also bothers the manager, who believes it could be reinvested “in the ramp-up of sustainable fuels.” The fact is: “Vienna has high costs, while other countries are more moderate.” Additionally, there are other location-specific “additional factors” in Austria, such as ancillary labor costs.
AUA is also particularly affected by the flight cancellations to Tel Aviv, Erbil, Amman, and Tehran due to the Middle East crisis, said the managers. Within the entire Lufthansa Group, Austrian is the most affected, Trestl explained on inquiry. “These connections have historically developed and are extremely important to us. Vienna has a vital hub function for these places towards North America, for example, Iran-Canada or Northern Iraq-USA.”
AUA stands out in the Middle East traffic, particularly with reliability. “It’s all the more painful when services have to be temporarily suspended,” Trestl stated. “Compared to other airlines in the group, Austrian has a significantly higher dependency here. When flights need to be canceled or the situation is volatile, it affects us much more than other companies.”
Regarding the scandal flight in a hailstorm, they are awaiting the final report. Once again, AUA management rejected anonymous allegations that pilots had been insufficiently trained and reiterated plans to sue for defamation.
From the managers’ perspective, unnecessary additional location costs throughout Europe are also arising from the EU program “Fitfor55,” which will increase costs in five-year increments starting in 2025. This will further fuel the influx of Chinese carriers, which can fly cheaper over Russia, a route European airlines have not taken since the invasion of Ukraine. Chinese airlines enjoy many more cost advantages and often offer rock-bottom prices. The goal of covering costs for China flights is becoming increasingly difficult for European airlines, Trestl noted. This could lead to a “restriction or even jeopardization” of China flights by European airlines.
The passenger share of EU airlines for travel from Europe to Asia has already reversed in recent years. Recently, about one-fifth of passengers were on EU airlines, one-third on Chinese airlines, and half on Gulf and Bosporus airlines.
AUA’s EBIT from January to October stood at €77 million. In the same period last year, it was €144 million. A high double-digit result is still expected for the entire year. In the third quarter alone, revenue was €783 million.
