Low-cost carrier Laudamotion will be expecting another round of losses in 2020 - its second year of operations.  However, according to Air Transport World, the Vienna-based budget airline is also expecting to see profits in it's 2021 Fiscal Year, as fleet and network reach a more efficient size and reduce overall costs.Originally founded by the late F1 racing legend Nikki Lauda, Laudamotion is now a wholly-owned subsidiary of budget airline Ryanair, as of January.  The low-cost carrier is estimating loses anywhere between €50 million to €70 million for its 2020 Fiscal Year.This is in addition to €140 million in initial losses for the 2019 Fiscal Year. The first year of losses was attributed by Ryanair to the late release of summer schedules, as well as low promotional fares and costly short-term aircraft lease agreements. Lufthansa branded their fares 'irresponsibly low', a notion that, in true Ryanair style, they turned into marketing gold.

CEO remains positive

Chief Executive of Laudamotion, Andreas Gruber, spoke with Air Transport World whilst in Vienna. Here's what he had to say:

“We are currently operating with a 94% load factor and we sold 7.3 million tickets. During the 2020 financial year, we expect 6.5 million passengers on more than 122 routes. This is a strong number, which we already reached in our second year of operations,”

It's clear that Gruber is fairly optimistic about moving the airline towards profitability, and so he should be. It's perfectly normal for any business (not just airlines) to fail to turn a profit in the first few years, as they will often require a large amount of upfront investment. In Laudamotion's case, this has included the acquisition of new aircraft and the opening of new bases.

According to Airfleets.net, Laudamotion has a fleet of 19 Airbus A320 and A321 aircraft. Photo: Wikipedia

More growth for LaudaMotion

The sale of Laudamotion to Ryanair will foster growth and expansion of the airline in Austria which, according to the website, currently has a fleet of 19 Airbus aircraft. Ryanair will be providing financial and management support to Laudamotion, with the addition of six wet-lease aircraft for the busy summer season. This takes the airline to a solid 21 aircraft starting this month.

For the winter season, Laudamotion will be launching a new route: Vienna to Billund, Denmark. It will also increase flight frequency to the Portuguese cities of Porto and Lisbon as well as Oslo, Norway; Copenhagen, Denmark, and Stockholm (Skavsta), Sweden.

“We are the largest LCC in Vienna. This summer we will operate 32 routes from Vienna, expecting 800,000 passengers,” Gruber told ATW.

Laudamotion's home base is in Vienna, Austria. Photo: Flickr user Marvin Mutz

Heavy competition

Laudamotion faces some strong competition on its home turf of Vienna. In fact, at the beginning of this month, Wizz Air made the announcement that it would be adding one additional aircraft to its Vienna base, taking the carrier to six aircraft flying out of the central European city.

Furthermore, it's been almost a year since IAG low-cost carrier LEVEL made an announcement that it would be establishing a base in Vienna. The group is planning to base four of its Airbus A321 aircraft in the city, initially flying them to 14 European destinations including Palma de Mallorca and London Gatwick as well as Barcelona, Malaga, Venice, Ibiza, Paris Charles de Gaulle, Milan Malpensa, Dubrovnik, Larnaca, and Bilbao.

Do you think Laudamotion's growth and profitability will go according to schedule? Or will it be crushed by the competition of a crowded marketplace such as in the case of WOW or Jet Airways? Also let us know if you've flown on this airline before! We'd love to know how it went!

We've reached out to Laudamotion for comment. We'll update this article if we hear back from them.