Austrian Airlines Cuts Recovery Forecast Amid Third COVID Wave

Amid another wave of coronavirus outbreaks across Europe in recent weeks, Austrian Airlines has had to implement further restructuring measures. The flag carrier of Austria has had to lower expectations and long-term park another two planes. Notably, The airline’s chief executive officer, Alexis von Hoensbroech, has shared that his company “will be completely different after the crisis.”

Austrian Aircraft
Austrian had already entered cost-cutting mode before the pandemic amid tough competition, but it has been forced to continue this process. Photo: Austrian Airlines

Having to adapt

According to a statement shared by Austrian today, the airline has been using the downturn period to prepare for its future. For instance, it has been centralizing flight traffic in Vienna, which, in turn, has forced the termination of all crew and technical bases in the federal provinces. Moreover, the carrier has been divesting itself of smaller aircraft such as the Dash 8 and Airbus A319. This process is now in its later stages.

The firm has additionally put together “multi-year anti-crisis packages” based on agreements reached with its staff along with suppliers and system partners in order to help offer favorable long-term earnings growth and the capacity to repay loans.

Along with these measures, Austrian Airlines recently shared that it is cutting down its office infrastructure. Here, four out of eight floors of its head office are being handed back to the Vienna Airport operating company, Flughafen Wien AG.

Austrian Airlines Airport
There have been additional measures across the board. Photo: Austrian Airlines

Extra steps

Overall, the airline’s leadership shares that it is aware of its responsibility to the country’s public. So, it wants to repay its debt as swiftly as possible.

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The head of the outfit, von Hoensbroech, highlights that the global health crisis is persisting significantly longer than initially expected and the impact will last for several years. With this in mind, Austrian can’t achieve its earnings target, which was defined in spring 2020. Most notably, to minimize risk, following previous groundings, it is parking two more of its Airbus aircraft for the long-term. Therefore, the total amount of operational fleet will be 58 aircraft, down from the current total of 80. These measures will last until as late as 2025.

Austrian Tails
Austrian shares that it seeks to increase fleet productivity amid the restructuring. Photo: Austrian Airlines

Not all doom and gloom

Nonetheless, there is hope for the future during these dark times. Michael Trestl, Austrian Airlines chief commercial officer and member of the executive board has spoken about the light at the end of the tunnel.

“Our liquidity cushion continues to be good, and we have faith that there will be a market recovery in the summer of 2021. We expect a sufficient number of people will be vaccinated throughout Europe by that time so that travelling will not have to go hand in hand with travel restrictions and travel bans any longer,” explains Trestl, as per the statement.

“The booking situation for this year’s holiday season is showing a positive development. The offering of long-haul flights will also be increased starting at Easter. New bookings for the peak season are being registered every day, for example, lately a 50 percent increase in new bookings for June through August in the last two weeks, compared to bookings in January for the same period. In turn, this makes the management of Austria’s flag carrier optimistic for the future. “One will hardly be able to hold people back from travelling thanks to the digital Green Pass in their bags.”

Austrian Airlines Flight Attendants
The operator recently returned to important markets such as London and Tel Aviv. Photo: Austrian Airlines

Ongoing challenges

Altogether, not many airlines would have expected that the aviation industry will still be in such a dire state a year after the pandemic was first declared. Even if there were predictions that the recovery would be slow, only a few would have thought that the stringent travel bans and related restrictions would still be ongoing. So, it’s not a surprise that Austrian is continuing to take action to safeguard its future.

What are your thoughts about Austrian Airlines’ position at the moment? Let us know what you think of the situation in the comment section.