The airline will revise downward their winter schedule form 50 percent to approximately 30 percent versus 2019. Austrian Airlines’ liquidity position remains above target and the airline will expand their ‘short-time’ work scheme for team members.
On Wednesday (October 7, 2020) Austrian Airlines announced that they will reduce their winter 2020/21 production (flight offering), from a planned 50 percent to around 30 percent, compared to the same period last year. The carrier has taken the decision due to a renewed global increase in COVID-19 cases and the associated travel restrictions. Austrian Airlines’ liquidity position is above target and the company believes they are equipped to weather a second coronavirus wave. In Wednesday’s announcement, Austrian Airlines’ CEO, Alexis von Hoensbroech, said,
“In the past few weeks, it became increasingly clear that we would have to dress more warmly this winter than we thought. The new entry restrictions on the part of Germany, Switzerland, Belgium and many other countries have made it necessary for us to make adjustments to our offering. We are prepared for this. Our objective is to maneuver our company through this ‘storm’ based on our combined efforts. We do not know how long this storm will last. For this reason, we have to make ourselves weatherproof and reduce the monthly outflow of funds as much as possible.”
For the winter 2020/21 season, which runs from the end of October until the end of March 2021, Austrian Airlines will serve 60 destinations, around 20 less than last winter. Additionally, the destinations which will be served will operate with reduced frequencies. Last week, the carrier resumed service to Shanghai joining their long-haul offering to Newark, Chicago, Washington and Bangkok. From mid-December, the airline plans to operate flight to popular holiday destinations including Cape Town, Mauritius and the Maldives.
As previously mentioned, Austrian Airlines’ liquidity position remains above target due to stringent cost control measures. The company expects to receive the last tranche of €100 million from a €300 million loan shortly and has received €150 million in emergency aid from the Austrian government as well as an additional €150 million in fresh equity capital from the Lufthansa Group. Austrian Airlines is currently experiencing a monthly cash burn of approximately €40 million and therefore continues to strive to reduce costs even further. Speaking on liquidity preservation measures, Austrian’s CCO and CFO, Andreas Otto, added,
“We are equipped to handle a second wave of the coronavirus thanks to our good liquidity situation, but next summer will be decisive. If we can get a grip on the coronavirus by then, land will be in sight again. Many passengers will also have a corresponding need to catch up with respect to travelling.”
Austrian Airlines is working on introducing rapid antibody tests for customers in order to restore the freedom to travel, even before a COVID-19 vaccine is developed. The carrier plans on rolling out a trial of their preflight testing program by mid-October.
Source: Austrian Airlines