Austrian Airlines says that an expected ”150m ($240m) cash injection will firm up its ambitious plans to target business travellers to the Middle East.
Speaking in Vienna today (31 March) on the occasion of Austrian Airlines” 50th birthday, executive vice president Rudolph Mertl said that the financial boost, provided by Saudi Sheik Mohamed Bin Issa Al Jaber, would fund strategic route and fleet development.
”Sheik Mohamed will invest ”150m and will receive some additional shares,” he said, adding, ”the major reason is that he believes in Vienna.”
The backing is subject to approval by Austrian Airlines” General Assembly meeting on 7 May at which point Sheik Mohamed, who also possesses Austrian citizenship, will own a 20% stake in the carrier.
Austrian Airlines has already pursued a highly successful strategy of penetrating Eastern European markets using its efficient Vienna hub, which can have a Minimum Connecting Time as low as 25 minutes, and is now training its sights firmly towards the burgeoning Middle East business travel sector.
Speaking to ABTN in Vienna today, Mertl said: ”With the money we will be able to expand at a faster rate ” it is fair to say we are focusing on business travel to the Middle East.”
Any such capital funding would allow Austrian to eventually acquire up to nine additional Airbus A320 aircraft, which would be configured using the carrier”s new ”Premium Service” concept. Starting with four A320s, Austrian will gradually kit out the machines using 24 so-called ”sleeper seats” with a 46” (117cm) pitch and 102 economy places at 32”, from July this year.
The move would see the Premium Service implemented on existing Middle East routes to Cairo, Damascus, Dubai, Erbil and Tehran, while adding Jeddah and Riyadh in Saudi Arabia, as well as Astana in Kazakhstan.
”We can concentrate more flights to the Middle East which is a high-yields market, more or less on a daily basis,” said Mertl.
The Austrian Airlines boss was in bullish mood in Vienna today, highlighting a tranche of statistics showing the carrier transporting 10.8m passengers to 130 worldwide destinations, while realising a small profit of ”3.3m on operating revenue totalling ”2.55bn.
Mertl added that Vienna”s position at the heart of Europe had resulted in Austrian expanding to the east at a rapid rate of knots. This, coupled with a Star Alliance eastern European market share of almost 50%, particularly with close neighbour Lufthansa, was clearly reaping rewards.
Focus on the east means that Austrian now serves 48 destinations in the region and such expansion will be aided by the carrier”s move with Saudi Arabian partners into the new Skylink terminal which is now being built.
And Mertl did not shy away either from the threat posed by low cost carriers, noting ”there is no doubt we have to do something to fight against them,” but added it would be a significant amount of time before low fair airlines could match Austrian”s network.