OS consolidates fleet, cuts (almost the rest of their) long haul flights

[Keith T 2]

As confirmed by their own release:

 

http://www.presseportal.de/story.htx?nr=894752&ressort=7

 

01.11.2006 - 20:41 Uhr, Austrian Airlines Pressemappe [Pressemappe]

 

--------------------------------------------------------------------------------

Disclosure announcement transmitted by euro adhoc. The issuer is responsible

for the content of this announcement.

--------------------------------------------------------------------------------

 

01.11.2006

 

Resolution passed to cut four Airbus A330 aircraft to achieve

fundamental consolidation of Austrian long-haul programme

 

In an Extraordinary Meeting held on 1 November 2006, the Supervisory

Board of Austrian Airlines AG has approved the proposal of the

Board of Management to cut the Airbus A330 fleet, which consists

of four long-haul aircraft, starting in 2007, in addition to

disposing of both Airbus A340-300 aircraft in 2007. This move

will introduce a fundamental repositioning of the Austrian

long-haul programme and represents a decisive step in the process of

fleet harmonisation.

 

The reduction of the long-haul fleet will streamline the Austrian

long-range route network. In concrete terms, scheduled services

to Shanghai will be terminated from 7 January 2007, flights to

Phuket, Mauritius and Colombo/Male from the end of April, and

those to Kathmandu in May 2007. Lauda Air will withdraw from

the long-haul charter segment in 2007. The routes to the cities of

Karachi in Pakistan and Chennai (Madras) in India that have

been under evaluation will not be opened up. The new US

destination Chicago will be incorporated into the network from 29

May 2007.

 

The adjustment of routes that generate losses due to

insufficient direct traffic share is a precondition for profitable

growth in the future. As a consequence of these restructuring

measures the Group expects -based on the losses accumulated in the

current year on the respective routes - a positive contribution

up to EUR 40m per year, which will - according to the Management

Board assumption - reach its full-year effect as of 2009, after

cutback of costs related to these measures.

 

Disclaimer: This adhoc-release constitutes neither an offer to

sell nor a solicitation to buy any securities. A public offer

of shares by Austrian Airlines Österreichische

Luftverkehrs-Aktiengesellschaft has not yet taken place. Any

securities orders received prior to the commencement of the offer

period will be rejected. If a public offer is made in Austria, a

prospectus will be published in accordance with the Austrian Capital

Market Act.

 

This adhoc-release is not being issued in the United States of

America (USA) and must not be distributed to "U.S. persons" (as

defined in Regulation S of the U.S. Securities Act of 1933, as

amended) or publications with a general circulation in the USA.

This adhoc-release does not constitute an offer or invitation

to purchase any securities in the USA. The securities of Austrian

Airlines Österreichische Luftverkehrs-Aktiengesellschaft have

not been registered under the Securities Act and may not be

offered, sold or delivered within the USA or to U.S. persons

absent from registration under or an applicable exemption from

the registration requirements of the United States securities

laws.

 

end of announcement euro adhoc 01.11.2006 20:01:54

--------------------------------------------------------------------------------

 

ots Originaltext: Austrian Airlines

Im Internet recherchierbar: http://www.presseportal.de

 

Further inquiry note:

Konzernkommunikation:

Johannes Davoras

Johann Jurceka

Tel.: 051766-1231

Edited November 2, 2006 by Keith T

[Pieter C. 5]

Holy Moly, it looks like they'll be de-graded to a 'Regional' (= European) airline only

 

Not a good sign: they might become a Lufthansa cityhopper in the end ?

[Keith T 2]

Holy Moly, it looks like they'll be de-graded to a 'Regional' (= European) airline only

 

Not a good sign: they might become a Lufthansa cityhopper in the end ?

 

Relax. They did say that they've added a new route to ORD. This indicates that they're streamlining their routes to concentrate on more profitable routes, like to the US and Africa. Notice how the routes dropped are those which run into direct competition with the Middle East carriers?

[Sandeep G 1]

ermmm.. ok... does this mean MAS could possibly restart Vienna services again??? <_>

[Pieter C. 5]

It's surprising to me, though, SHA will be dropped, figuring the upcoming Chinese market

 

KTM, HKT, MRU and MLE: fine, these are low-yield tourist destinations...

[Keith T 2]

ermmm.. ok... does this mean MAS could possibly restart Vienna services again??? <_>

 

SQ doesn't fly the route with their own metal either, ie very low demand.

On OS metal SIN-VIE, SQ only does a hard block on each flight of about 4 seats in Y and 4 seats in J for their codeshare.

 

 

It's surprising to me, though, SHA will be dropped, figuring the upcoming Chinese market

 

Too true.

Perhaps there is too much competition from the bigger carriers?

[BC Tam 2]

Pardon the ignorance, but what on earth is a "hard block" ?

 

I don't fully buy the theory about low-yield tourist routes not being profitable - perhaps less profitable. If airlines continue dropping these routes just so they can concentrate on the milk and honey runs, then the resulting competition on those lucrative routes will no doubt drive yields down. Then what ?!

Edited November 2, 2006 by BC Tam

[Pieter C. 5]

Blocked-off seats on another airline...

 

Like PR blocking off seats on KL0803 on their behalf on the AMS-MNL stretch

 

(this is example:

1.C/ 5PALBLOCK

1 KL 803 M MO 6NOV AMSMNL HK5 1415 0950#1 M ES

OWNER-KL 76U85U

SUPPLEMENTARY INFORMATION

001 GRPS YY PALBLOCK

 

No need to give names to KLM as these seats for PAL and they can do with them whatever they like...

Hope, clear now

 

 

[BC Tam 2]

this is example:

1.C/ 5PALBLOCK

1 KL 803 M MO 6NOV AMSMNL HK5 1415 0950#1 M ES

OWNER-KL 76U85U

SUPPLEMENTARY INFORMATION

001 GRPS YY PALBLOCK

 

..... clear now

You're kidding right ? It's absolute double Dutch (pun intended !) to me. I get the general idea but there seem to be a lot of coded messages up there. Care to elaborate ? Thanks

Edited November 2, 2006 by BC Tam

[Pieter C. 5]

BC,

 

All is says here in the reservations-system = 5 seats blocked for PAL (Philippine Air Lines)

booked on KL0803 in M-class on monday 06nov2006 from AMS to MNL holding confirmed departure 1415 local arrival 0950 local one day later; it than shows M-class again and 'special service message', which can be seen at the bottom as 'groups palblock'

 

Hope clear now ?!

[KK Lee 5]

 

'Hard Block'= 'Code Share'

 

 

[BC Tam 2]

Thanks Pieter, I think I should leave such details to the professionals !

[Pieter C. 5]

You're welcome, BC, here's some more 'news':

 

Austrian to eliminate six long-haul aircraft, cites losses on long-haul operations

 

Friday November 3, 2006

Austrian Airlines said yesterday that it will cut its long-haul fleet from 16 to 10 aircraft, resulting in route eliminations and likely job reductions.

 

The carrier's supervisory board on Nov. 1 approved a proposal to eliminate four A330-200s in 2007. With the sale of two remaining A340-300s slated to be completed next year, the long-haul fleet will consist of four 777-200ERs and six 767-300ERs by no later than the end of 2007.

 

According to media reports in Austria, the airline is expecting a loss from its long-haul operations of €80 million ($102.1 million) for this year, widened from a loss of €75.9 million last year. It said its long-haul program has come under "increasing commercial pressure," noting that the share of passengers who transfer from the current long-haul network onto medium-haul flights is 14% and that long-haul services generate only 7% of its overall revenue.

 

As a consequence of the fleet downsizing, services to Shanghai will be terminated from Jan. 7, flights to Phuket, Mauritius and Colombo/Male will end in April and flights to Kathmandu will terminate in May. Austrian media is reporting that 700-1,000 employees are expected to lose their jobs as a result of the fleet reductions

 

Not only downsizing in aircraft size, but also in employees <_ src="%7B___base_url___%7D/uploads/emoticons/default_sad.png" alt=":(">

 

(One more reason to visit VIE as soon as possible, Markus )...

 

[Sanjay Thaker 0]

Yes...MAS should restart VIE

[Keith T 2]

(One more reason to visit VIE as soon as possible, Markus )...

 

Stay at the Imperial Hotel and have one of those Imperial Tortes for me while you're there.

Both the hotel and its cake are legendary...

Edited November 3, 2006 by Keith T

[Sandeep G 1]

Well I believe OS's loads from VIE to SYD via KUL were quite good, and lots of load picked up in KUL... perhaps an A332 service?? BUT! Won't be useful if MAS joining skyteam and can therefore use AF-KL flights to VIE.

[Pieter C. 5]

Well I believe OS's loads from VIE to SYD via KUL were quite good, and lots of load picked up in KUL...

 

Loads don't say a thing about yields

 

OS is known to be quite 'cheap' to Asia overhere in NL, especially their 'Red Tickets' are a bargain...

 

[Keith T 2]

Loads don't say a thing about yields

 

OS is known to be quite 'cheap' to Asia overhere in NL, especially their 'Red Tickets' are a bargain...

 

Check out the W class fares to PVG.