FLUG REVUE June 2003: Styrian Spirit takes on Austrian

STYRIAN SPIRIT TAKES ON AUSTRIAN MONOPOLY

By Franz Zussner

The panther is universally popular as a heraldic animal, and especially so in the Austrian province of Styria. It is therefore no coincidence that it has been chosen as the icon for the new Styrian airline. Since 24 March 2003, Styrian Spirit has been operating services to the German cities of Frankfurt am Main, Düsseldorf, Munich and Stuttgart from its home base of Graz as well as from Linz and Vienna. Initially it is flying with three 50-seat Bombardier CRJ200 (tail codes OE-LSC, OE-LSD and OE-LSS), leased from Maersk Air of Denmark and its UK subsidiary on apparently extremely favourable terms. A general overhaul and avionics upgrade of the jets was carried out by the Avmax company of Calgary to equip them for service in the Alpine Republic. The new avionics includes a head-up guidance system (HGS), an upgrade of the engine indication and crew alerting system (EICAS) and an enhanced ground proximity warning system (EGPWS).

The Austrians have signed a maintenance contract with nearby Adria Airways, under which the aircraft will be serviced in Adria Airways' station in Graz, partly using Styrian personnel. Styrian expects to receive its JAR-145 licence by the end of 2003.

The idea of founding a Styrian airline, which originally was to be called Styrian Airways, came from the former regional manager of Tyrolean Airways, Georg Pommer, a native of Styria who succeeded in selling his idea to several major commercial enterprises in Styria and getting them to raise the necessary finance. One of the conditions attached by this industrial group was that Pommer should find himself an experienced and prominent aviation expert to advise Styrian Airways. This Pommer did, in the form of Fritz Feitl, former CEO of Tyrolean.

However, Feitl then went on to entice his associate and former CEO of Lauda-Air, Otmar Lenz, away from Lauda-Air Italia, where he was now working, to become the chief executive of Styrian-Airways. It was this, evidently, amongst other things that induced Pommer to throw in the towel at Styrian. With an equity capital of Euro 8 million, the financiers incorporated themselves as Styrian Airways Beteilgungs AG, with Fritz Feitl as chairman.

At that time the two members of “Star”, Austrian and Lufthansa, had a virtual monopoly on flights between Austria and Germany, along with the smaller carriers Air Alps and Adria Airways. This situation meant that fares were extremely high, and this had long been a source of irritation not only to the EU competition watchdogs but also to many domestic business travellers.

Lenz hopes to infuse a breath of fresh air plus a healthy portion of competition into this monopoly-like situation, and so he christened the new Styrian airline “Styrian Spirit”. In keeping with the catchphrase, “Best fare business air”, tickets cost between 20 and 40 percent less than from Austrian or Lufthansa and are free of restrictions. Moreover, passengers are still able to collect miles in the Lufthansa frequent flyer programme. However, Lenz makes a point of saying that he does not wish Styrian Spirit to be a no-frills airline, but to offer a transparent fare model and flying times that appeal to the requirements of business customers. At weekends, the scheduled flight programme is supplemented by charter flights from Graz, Linz and Innsbruck to destinations such as Sicily, Heraklion and Corfu. Austrian and Lufthansa are already countering with special fares (€110 and €150 respectively, without taxes) to Germany and the United Kingdom. Styrian Spirit believes that this action contravenes the EU competition rules and has initiated proceedings in the commercial court of Vienna against Austrian Airlines which themselves view the allegations as being without any foundation. Meanwhile Styrian has cancelled its Graz-Munich route because of competition from Lufthansa.

Management of the Graz-based company, which has a total workforce of 80, including 20 flight attendants and 25 pilots mostly from Lauda Air, has made it a priority to offer a distinctive on-board service, and this seems to be going down well with the clientèle. Thus, off-peak services are already enjoying over 50 percent utilisation, and this is increasing. Assuming that civil aviation recovers, the airline is expecting to break even as early as 2004. If this happens, the Austrians are planning to expand their fleet by a further three CRJ200's. Nonetheless, Feitl points out, “If we had had the option of changing the date on which we began flying operations, it would have been an easy decision for us, but we had reached the point of no return!” This year the company expects to achieve 92,000 passengers and €23 million of revenue.

From page 24 of FLUG REVUE 6/2003

Last updated 12 May 2003

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