Austria prepares to welcome football fans after record winter ski traffic

Map: Austria map

As one of the two host nations (along with Switzerland) of this year’s Euro 2008 football championships, Austrian tourism organisations may have mixed feelings about the failure of any British teams to qualify. While British football fans are well-known for generously partaking of local hospitality (especially in bars) this has often been marred by outbreaks of violence and run-ins with local law enforcement.

Image: Austrian Fan Line
Austrian Airlines is partnering with the City of Vienna during the Euro 2008 football championships. It has created a special design which features on one of its A320s and describes itself as an ‘Unofficial Fan Line’.

In the meantime this winter’s excellent skiing conditions have seen airports reporting record traffic flows. Austria’s airport traffic is dominated by Vienna, with the next five busiest airports in total generating under five million passengers in 2006 compared with nearly 17 million at the capital’s Schwechat airport.

Chart: CHT Austria 96-06
Source: Airport reports

Traffic across all Austria’s major commercial airports has increased by 78% in the 10 years from 1996 to 2006. Vienna’s traffic has increased by 84% during the same period, resulting in its share of Austria’s total traffic growing from 75% to 78%. After modest growth between 2001 and 2003, traffic grew by an impressive 15% in 2004, followed by growth of 7% in 2005 and 6% in 2006.

Chart: CHT Austrian Airports
Source: Airport reports

Logo: KlagenfurtSalzburg is the only other airport with over one million annual passengers, with traffic peaking in the winter to serve the ski market. Klagenfurt’s 20% drop in traffic in 2006 can mostly be attributed to the termination of Ryanair’s daily London Stansted service (though it returned at the end of 2006 with just three flights per week), and the ending of Frankfurt Hahn services which operated during the summer of 2005.

Vienna: dominant and growing fast

Vienna dominates the Austrian aviation scene and thanks to recent developments it is becoming ever more dominant.

Chart: CHT VIE seasonality
Source: Vienna Airport

Logo: ViennaAfter recording growth of 6.3% in 2006 growth this year will be over 10%, boosted by the decision of SkyEurope to increase its presence at the airport from two to six aircraft. As a result Vienna’s traffic was up an impressive 21.8% in November. Unlike the ski resort airports, Vienna’s seasonality profile follows a more traditional pattern with a peak to off-peak ratio of around 1.65.

Image: Business lounge
SkyEurope launched 16 new routes from Vienna last year with a welcome that included a glass of champagne and snacks at check-in.

Small domestic market

Austria’s domestic market consists of five routes from Vienna to each of the other significant airports, plus Linz to Salzburg, Linz to Graz and Innsbruck to Graz. Austrian Airlines has an 86% share of domestic movements and an 81% share of domestic capacity this January (Source: OAG Max Online for w/c 7 January 2008). The only route on which competition exists is between Vienna and Innsbruck where SkyEurope offers 18 departures per week compared to over 40 with Austrian. The only other carrier in the domestic market is Welcome Air which operates 10 flights per week between Innsbruck and Graz using 31-seat Dornier 328s.

Austrian faces growing threat from LCCs

Image: Vienna’s Skylink terminal
CAP: Vienna’s new Skylink terminal is scheduled to open in 2009.

After reporting modest net profits in 2003 and 2004, Star Alliance member Austrian Airlines suffered significant losses in both 2005 and 2006. Between 2003 and 2006 passenger numbers grew by 28% from 8.5 million to 10.8 million. According to AEA statistics, in the first nine months of 2007 passenger numbers are up 4% despite a 10% reduction in RPKs and a 12% reduction in ASKs, achieved mainly by axing several unprofitable long-haul routes (including Melbourne, Sydney, Kuala Lumpur, Singapore and Colombo). As a result, load factors have increased by just over one percentage point.

Logo: AustrianAnalysing across all Austrian airports, Austrian Airlines still has nearly 50% of all flights and over 40% of capacity. Its nearest challenger is Air Berlin which, when combined with local LCC niki (in which it has a significant stake), has almost 10% of capacity but operates only a fifth as many routes as Austrian.

Airline Frequency Share Capacity Share Number Of Routes
Austrian 47.5% 41.6% 111
Air Berlin + niki 6.1% 9.2% 22
Lufthansa 9.8% 7.8% 12
SkyEurope 4.9% 6.5% 18
TUIfly 2.4% 3.5% 14
Source: OAG Max Online for w/c 7 January 2008

SkyEurope competes directly with Austrian on 12 of its 18 routes and indirectly on four of the remaining six. Only Lisbon and Naples are not served by Austrian. TUIfly achieves its fifth place despite not serving Vienna. Ryanair which has a 3.1% capacity share also avoids Vienna and offers a total of 12 routes, seven to Salzburg, two to Graz and Linz and one to Klagenfurt. easyJet only entered the Austrian market towards the end of 2007 with London Luton flights to Vienna, and Innsbruck served from Bristol, Liverpool and London Gatwick.

This winter LCCs are responsible for around 28% of scheduled capacity on international routes to/from Austria. Apart from those LCCs already mentioned, Aer Lingus, Germanwings, Thomsonfly, Transavia, Click Air, Norwegian, Jet2.com and Sterling also have a presence in the Austrian market this winter.

Gateway to Eastern Europe

Analysis of winter schedules reveals that, unsurprisingly, Germany is the main international market for flights to/from Austria.

Airline Frequency Share Capacity Share Number Of Routes
Germany 31.2% 28.6% 63
United Kingdom 6.5% 9.2% 32
Italy 6.8% 4.6% 15
France 3.9% 4.5% 7
Switzerland 5.7% 4.3% 8
Source: OAG Max Online for w/c 7 January 2008

Image: Austrian advertAustrian’s highly advertised focus on making Vienna the preferred gateway between Western and Eastern Europe means that the airport offers some fairly unusual destinations. Its own annual report from 2006 identifies 45 destinations in 23 Eastern European countries and the ‘Focus East’ strategy is one of the core elements of trying to revive the airline’s fortunes. Only 40% of Austrian’s traffic is ‘local’ with 60% using Vienna as a transfer point.

New routes launched in 2007 by Austrian included Bourgas (Bulgaria), Chicago O’Hare, Tallinn (Estonia), Astana (Kazakhstan) and London City. This summer will see the introduction of several more new routes to Nizhnyi Novgorod, Sochi, Jeddah, Riyadh, Mostar, Wroclaw and Baia Mare.


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