Transportation Industry

Company Watch - Austrian Airlines

AirGuide Business, July 14, 2008

7/14/2008

Air China has cast an eye on the possible sale of a stake in loss-making carrier Austrian Airlines by the Austrian government, an Austrian magazine reported on Wednesday. Austrian magazine NEWS quoted Air China acting Chairman Kong Dong as saying he would look at a possible Austrian sale. The Austrian government has hired advisers to look at possible buyers for parts or all of its 43 percent stake in Austrian. 7/16/2008

Austrian Airlines Group said yesterday that it will cut overall capacity by 5% for the coming winter season. Citing high fuel prices and weak demand, AAG said it will close its double-daily Vienna-London City service from Aug 18. In the winter, VIE-Chicago O'Hare flights will cease and frequencies from VIE to New York JFK and Mumbai will be reduced. Its fleet will be lowered by three aircraft in 2009. It did not announce any layoffs but warned that further cost-cutting actions could become necessary in the future. 7/10/2008

Austrian Airlines yesterday reached agreement with AeroLogic, the Lufthansa/DHL cargo joint venture, to train its pilots for type ratings for the Boeing 777-200F. 7/7/2008

Royal Jordanian is preparing an offer for the Austrian state's stake in loss-making Austrian Airlines and may present it as early as next week, an Austrian newspaper reported on Friday. Royal Jordanian, which was the first Arab airline to be privatized last year, has hired PricewaterhouseCooper to advise it on the bid, Austria's Wiener Zeitung daily reported, quoting unidentified diplomatic sources. A spokeswoman for the Austrian government's holding company OeIAG declined to comment on the report. She said OeIAG was not entitled to discuss a sale of its stake before it received a government mandate to sell it. Royal Jordanian was not available to comment. The Austrian government has asked for a review of the options for the carrier, which last month predicted it would make a loss of up to EUR90 million euros (USD$143 million) this year due to rising fuel prices. The review will be presented to Austrian Airline's supervisory board on July 28. The outgoing Austrian government is deeply split about a possible sale of the stake. 7/18/2008

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