1. Austrian Airlines’ Origins
Austrian Airline’s genesis can be traced back to March 20, 1918, at which time the Austrian Postal Administration had inaugurated daily scheduled mail service from Vienna to Kiew with intermediate stops in Krakow, Lwow, and Proskurow, a route whose average stage length had been 250 kilometers. When space had permitted, passengers had also been carried. The highly successful, punctual service was later extended from Proskurow to Odessa and from Vienna to Budapest. However, a flight prohibition, implemented at the end of World War I, had resulted in its termination.
When the ban had finally been lifted, Austria subsequently reentered the civil aviation market by founding the Oesterreichische Luftverkehrs AG (OELAG) on May 12, 1923 with an initial one million Crown investment financed by Junkers, a German aircraft manufacturer (49 percent), and various Austrian shareholders (51 percent). Commencing scheduled service from Munich to Vienna some two days later, it had utilized a Junkers F.13, a single-engined, low-wing monoplane which had featured an enclosed cockpit and passenger cabin and had rested on a tail wheel. OELAG eventually operated several versions of this rugged, but (then) modern design, and increasing demand had soon necessitated larger aircraft, the first of which had been a higher-capacity, tri-engined Junkers G.24 delivered in 1927 and the second of which had been the more advanced G.31, delivered the following year. Perhaps the ultimate design had been the Junkers Ju.52/3m, a tri-engined, 18-passenger airliner with a gross weight of 24,000 pounds and a cruise speed in excess of 150 mph, which had joined the fleet in 1936. Most major East and West European flag carriers had also operated the type at this time.
By the following year, OELAG’s route system had radiated to Athens, Belgrade, Berlin, London, Paris, Prague, Rome, and Zurich, in addition to incorporating several Austrian domestic destinations, with much of the service daily. It eventually became the fourth largest European carrier after Lufthansa, KLM, and Air France, with 975,840 weekly seat-kilometers. Coincident with OELAG’s growth had been the completion of five Austrian airports–namely, Graz, Innsbruck, Klagenfurt, Salzburg, and Vienna.
When Austria had been absorbed into the Third Reich in 1938, OELAG had been incorporated into Deutsche Luft Hansa (DLH). Nevertheless, it had flown 120,000 passengers 7.5 million kilometers without fatality during its reign.
2. Initial Growth
When World War II had ended, Austria, now independent, had signed the Peace Treaty with all four occupying powers in 1955, and had once again sought to enter the civil aviation field by forming a flag carrier. Two such national airlines were actually proposed: Air Austria, formed by the Austrian People’s Party and capitalized by KLM and later Fred Olsen, a Norwegian charter company, and Austrian Airways, formed by the Austrian Socialist Party and financially supported by SAS. Neither ever flew and the two were eventually combined on September 30, 1957 to form an integrated company with an initial AUS 60 million investment which adopted, Phoenix-like, its pre-war name of Oesterreichische Luftverkehrs AG, but whose English equivalent of “Austrian Airlines” had now been used. The airline had thus been born.
Ownership had encompassed Austrian private investors, at 42 percent; public enterprises, at 28 percent; SAS, at 15 percent; and Fred Olsen, at 15 percent. Austrian inaugurated scheduled service on March 31, 1958 after a 20-year suspension with four leased Vickers V.779 Viscounts, a medium-capacity, four-engined turboprop airliner designed in Great Britain and initially deployed over the Vienna-Zurich-London route. Austrian had finally returned to the sky.
Growth proceeded rapidly and, in 1960, it took delivery of the first of four larger-capacity, stretched Vickers V.837 Viscounts, which it inaugurated into service on May 23, and the following year it received the Vickers V.845 Viscount for slightly lower-capacity routes. Both British turboprops provided reliable, economical service, the V.837 not being retired until 1971. The Douglas DC-3, the best-selling civil airliner of all time, had also been acquired at this time and had enabled Austrian to inaugurate domestic services on May 1, 1963, a route which would later be served by Austrian Air Services. This aircraft was replaced by the more advanced, larger-capacity, turboprop-powered Hawker Siddeley HS.748-2 in 1966, another British design.
Austrian Airlines entered the jet age on February 20, 1963 when it inaugurated the first of five Sud-Aviation SE.210-VIR Caravelle twin-jets into service and set the stage for its eventual strategy of operating short- to medium-range, low- to medium-capacity, t-tailed twin-jets on a predominantly European (and later North African and Middle Eastern) route structure. Designed in France, the Caravelle was quiet, cruised above the weather, and reduced flying times between European capitals, and had, in fact, been the first design to permit economical, short-range, pure-jet service.
3. Transatlantic Experiment
Contrary to most European flag carriers, which had operated transatlantic service to the United Stares and Canada with quad-engined DC-4s since World War II, Austrian Airlines had maintained its medium-range route system until April 1, 1969. It had been at this time that it had stretched its wings across the Atlantic with a large-capacity, intercontinental Boeing 707-320, registered OE-LBA and chartered from Sabena Belgian World Airways, which had been deployed on the Vienna-New York route with an intermediate stop in Brussels. This so-called “transatlantic experiment,” despite Austrian’s delay in launching it, had ultimately proven both a premature and financially unsound one for two primary reasons:
1. The home market had still been too small.
2. Vienna-Schwechat had been insufficiently developed as a hub, providing few connecting flights to which this transatlantic service could transfer passengers.
Resultantly, after a two-year trial, the 707 had been returned to Sabena on March 31, 1971, leaving Austrian once again to concentrate on its primarily continental route system for which nine short-to medium-range, low-capacity McDonnell-Douglas DC-9-30s had been ordered.
Similar in overall design to the Caravelle, but manufactured in the United States, the t-tailed jetliner offered a slightly higher passenger capacity, greater payload capability, a higher gross weight, more powerful engines, and improved economy, and with it Austrian entered a new era which would span almost two decades. It had later described this design as “the start of something big, classical and still modern.” The first DC-9-30 had been delivered on June 19, 1971 and the type soon proved to be the mainstay of its fleet.
In 1974, Austrian leased a McDonnell-Douglas DC-8-63F, registered OE-IBO, from Overseas National Airways (ONA) for cargo services to Hong Kong, but these were later discontinued. Other than the 707-320, the DC-8-63F was its only other large-capacity, long-range, quad-engined jet.
So versatile and popular had the DC-9 design proven itself to be, that Austrian later ordered five stretched, higher-capacity DC-9-50s. The first of these had been delivered on September 14, 1975.
That these twin-engined aircraft and the discontinuation of its transatlantic service were proper strategies for the Austrian national carrier had been reflected by its positive growth. On June 26, 1974, for example, a new maintenance base had been opened at Schwechat International Airport-Vienna. Its value had also continued to swell: in 1967 its share capital had increased by AUS 140 million to AUS 290 million. In 1969, it had further increased to 390 million. And in 1962 it had reached the one billion mark. During each of the three years, from 1972 to 1974, it had posted a profit. Its route system had equally expanded: in 1976, Austrian had stretched its wings to Cairo in the Middle East and to Stockholm and Helsinki in Scandinavia.
Demand, soon outpacing capacity, had necessitated an initial order for eight McDonnell-Douglas DC-9-80s to replace its existing DC-9-50s. Also designated DC-9 Super 80, this aircraft had been a more modernized version of the previous –50 series variant for medium-range deployment and featured a further fuselage stretch for still higher capacity and refanned, higher-thrust, and more fuel-efficient Pratt and Whitney JT8D-209 engines. Austrian, which shared the distinction of being launch customer for the design with Swissair, inaugurated the first elongated DC-9-81 into service on October 26, 1980 on the Vienna-Zurich route with aircraft OE-LDR “Wien.” The twin-jet was later redesignated MD-81 and quickly became the short- to medium-range workhorse of its fleet.
New additions to its ever-expanding route system included Larnaca in 1979; Jeddah, also in 1979; and Tripoli in 1981.
Another 1980 milestone had been the foundation of Austrian Air Services (AAS), which would eventually become a wholly-owned subsidiary, to operate Austrian domestic routes with two 19-passenger, twin-turboprop Fairchild Swearingen Metro II commuter aircraft. The first such service had been operated on April 1.
Austrian plied smooth skies. Indeed, its 1980 balance sheet had indicated a AUS 71.5 million net profit, its tenth consecutive one.
The MD-81, intemittently proving itself to be as optimally suited to its route system as the twin-jet SE.210-VIR, the DC-9-30, and the DC-9-50 had been, was followed by its shorter-fuselage derivative, the MD-87, which Austrian ordered on December 19, 1984 for lower-capacity route sectors, and the Austrian Air Services fleet was equally upgraded with the addition of two 50-passenger Fokker F.50 twin-turboprops which were ordered on September 25 of the following year.
4. Transatlantic Return
Operating a modern, fuel-efficient fleet over an expanding route system and carrying almost 1.5 million passengers in 1986, Austrian once again contemplated intercontinental service, now both to New York in the west and to Tokyo in the east, and toward this end it had converted its previous order for two medium-range Airbus Industrie A-310-200s to the long-range A-310-300 version on June 25, 1986. Austrian had signed the original memorandum of understanding for the A-310-200s as far back as April 18, 1979, a date which was to prove a full decade before the service would actually get off the ground. Three factors could be cited as to why the time may have been ripe for a relaunching of this service:
1. In the 15-year interval since the last intercontinental service had been terminated, the home market had considerably grown, a fact demonstrated by the prevailing increases in nonstop US-Vienna service, provided by Pan Am, Royal Jordanian, and Tarom from New York, and by American from Chicago.
2. Its route structure in general equally offered excellent connections to West European, North African, and Middle Eastern destinations.
3. The A-310 had thus enabled long, thin routes such as Lyon-New York with Air France, Frankfurt-Newark with Lufthansa, Istanbul-New York with THY, and New York-Stockholm with Pan Am to have been served.
The decision to reinstate intercontinental service, scheduled for the spring of 1989, had officially been made two years earlier, on June 25, 1987, and would be operated by two Pratt and Whitney-powered A-310-300s which would serve the Vienna-New York and Vienna-Moscow-Tokyo routes, the latter in cooperation with Aeroflot and ANA All-Nippon Airways. These services had been predicted to have depended upon the connecting passenger for profitability. On the New York route, for example, a 66-percent, break-even load factor had been needed during the first year of operation, primarily comprised of US-originating, Austria-originating, and connecting passengers. Both routes had relied on the lucrative, high-yield, frequent business traveler who had been unable to take advantage of the lower, restricted fares. Austrian Airlines would offer a first class cabin on its A-310-300s for the first time in its history.
The first aircraft, registered OE-LAA “New York,” had been delivered on December 22, 1988, and the second, OE-LAB “Tokyo,” had followed in January. The aircraft had constituted the airline’s first widebody, twin-aisle type.
Austrian had returned to the transatlantic US market on Easter Sunday, March 26, 1989, when two smoke puffs had signaled the touchdown of the red-white-red liveried widebody twin-jet, configured for 12 first class, 37 business class, and 123 economy class passengers, at JFK amid warm spring weather. After a brief turn-around, the aircraft, operating as Flight OS 502 and piloted by Captain Braeuer and First Officer Kutzenberger, had been tug-maneuvered away from the gate at 1900 with 121 passengers, who would be served by nine cabin attendants, and took off into the deep purple dusk at a take off weight of 153,603 kilos, 40,300 of which had been fuel required for the Atlantic crossing. The flight had been 18 years in the making.
Airport, reservations, sales, and marketing staff had subsequently gathered in the Icelandair Saga Lounge used by its business class passengers for a celebratory drink and a group photograph.
The Tokyo route had been opened in the summer and the A-310, to become Austrian’s intercontinental widebody, had served it for more than a decade, operating to multiple US, African, and Far Eastern destinations with four aircraft in a final two-class seat configuration registered as follows:
1. OE-LAA
2. OE-LAB
3. OE-LAC
4. OE-LAD
By the summer of 1989, Austrian Airlines had served 54 cities in 36 countries in the United States, Western Europe, Eastern Europe, North Africa, the Middle East, and Japan with a total route length of 100,358 unduplicated kilometers. These services had been operated by 26 aircraft comprised of the Fokker F.50, the McDonnell-Douglas MD-81/82/83/87, and the Airbus A-310-300 whose average age had then been four years and had been describable as follows:
1. Airbus A-310-300: A long-range, medium-capacity, wide-body, twin-aisle, twin-engine jet airliner–Austrian Airlines’ intercontinental jet. Austrian Airlines had dubbed it an “intercontinental European.”
2. McDonnell-Douglas MD-81: A medium-range, medium-capacity, narrow-body, single-aisle, twin-engine jet airliner–Austrian Airline’s European, North African, and Middle Eastern workhorse. Austrian Airlines had described it as a “universal medium-haul airliner and the mainstay of its fleet.”
3. McDonnell-Douglas MD-82: The carrier had ordered the variant “for special-duty scheduled and charter services.”
4. McDonnell-Douglas MD-87: The short-fuselaged, lower-capacity version had been “tailor-made to its needs in capacity and range.”
5. Fokker F.50: A short- and regional-range, low-capacity, narrow-body, single-aisle, twin-engine turboprop airliner operated by Austrian Airline’s Austrian Air Services subsidiary on domestic and select long, thin international routes. Austrian Airlines had considered it “a propjet specialist in city-hopping.”
In addition to Austrian Air Services, Austrian Airlines owned 80 percent of Austrian Air Transport (AAT), which operated worldwide charter and inclusive tour (IT) flights with both Austrian Airlines and Austrian Air Services aircraft, having carried 506,000 passengers in 1988. It also maintained a close marketing agreement with Tyrolean Airways which operated services from Innsbruck with 37-passenger de Havilland of Canada DHC-8-100s and 50-passenger DHC-7-100s.
5. JFK Station Evolution
Initial training, held at Austrian Airlines’ North American headquarters in Whitestone, New York, and taught by Peter “Luigi” Huebner, commenced on February 6, 1989, or some six weeks before the inaugural flight, and had included the “Passenger Handling I” and “Adios Check-In” courses.
Austrian Airlines’ first JFK location, the East Wing of the no-longer-existent International Arrivals Building, had shared facilities with Icelandair, including five Austrian-specific check-in counters and the jointly-used Icelandair Saga Lounge, the former equipped with computers, automated boarding pass printers, and laser-scannable baggage tag printers. The ground staff, entirely employed and trained by Austrian and outfitted in its uniform, had performed the full spectrum of functions: Passenger Service, Ticket Sales, Lost-and-Found, Load Control, Administration, Supervision, and Management.
However, the success of the operation relied upon the equipment which had serviced it and it had been the decision of Airbus Industrie to scale-down its full-size A-300 which had resulted in the A-310-300 and had made the reinstated transatlantic operation possible. Its long-range, twin-engine, wide body design, of concurrent technology, had offered the same range and twin-aisle comfort to the passenger as the comparable quad-engined 747 or the tri-engined DC-10 or L-1011, yet at the same time had been a quiet, fuel-efficient aircraft with a small enough capacity to permit profitable, year-round operations. The larger 747, DC-10, or L-1011 would have, because of market size, been forced to operate at a loss for most of the year except during the peak summer travel season. Any of the other then long-range aircraft, inclusive of the Boeing 707 and the McDonnell-Douglas DC-8, had featured older-generation, fuel-thirsty, noise-emissive, four-engined technology of early-1960s design which, because of newly enforced Stage 2 noise requirements, would have been banned from US operation unless they had been hush-kitted or altogether engine-retrofitted. It had been because of the very A-310 that Austrian Airlines and other smaller European carriers like it had been able to profitably operate the long, thin Vienna-New York route sector.
The initial 1989 timetable had offered six weekly frequencies during the summer and five in the winter, at which time two A-310-300s had operated both transatlantically to New York and to the Far East, via Moscow, to Tokyo. They alternatively flew the longer-range sectors to Tel Aviv, Istanbul, and Teheran. During the first six months of JFK operations, an aircraft had never experienced an excessive delay because of aircraft scheduling and on-time performance had been exemplary.
In-flight service had represented a large portion of an airline’s expenditure. As a result, many of the carriers had begun to reduce this in order to decrease costs. Austrian Airlines, however, remained unique in a world aloft reduced to snacks and paper cups by providing printed menus, amenity kits, china service, complimentary alcoholic beverages, and free earphones in the coach cabin on the Vienna-New York and New York-Vienna route, a concept which had placed its product at the very top of the quality list.
Because of the size of the A-310, however, lower-deck cargo space had been limited, with the forward hold usually accommodating the baggage unit load devices (ULDs) and the aft hold accommodating the cargo itself, which had often been restricted to two pallets and a single AKE unit.
There had always been a certain “prestige” to flying to New York. Although the number of annual passengers entering the United States through JFK had begun to decline as an increasing number of alternative US gateways had become available, it had still been the largest entry point. New York had therefore remained the most logical destination for a small carrier which had only served a single US city. Because JFK had handled 1990 traffic with a (then) insufficiently sized, outmoded 1950s International Arrivals Building facility, the operation often suffered service deteriorations, particularly during peak arrival times when it had became very strained, entailing delays during taxi and subsequent immigration, luggage retrieval, and customs formalities. The saturated air traffic conditions stretching from Boston to Washington through which the aircraft had to fly; the subsequently dense approach pattern formed by JFK, La Guardia, and Newark International Airports; and the final difficulty in obtaining a landing slot equally impacted operations. Passengers had often underestimated the time required to complete arrival processing after actually leaving the aircraft. It had, however, been this environment that Austrian Airlines had chosen when it had elected to partake of the “New York experience.”
Although these negative facets of the operation had sometimes placed it in a poor light, it had, in fact, been JFK’s operations, and not Austrian’s, which had been observed, since all carriers operating into JFK had fallen victim to these ills, and because of them, an extensive renovation and rebuilding project, designated “JFK 2000,” had at this time been launched, which would ultimately lead to the construction or renovation of almost every terminal, new parking garages, and an inter-airport light rail system.
Although New York-Vienna load factors had initially been low, these had steadily increased until the vast majority of flights had been full. Large tour groups had constituted an increasing portion of the passenger mixture, along with the anticipated connecting passenger, who had been able to take advantage of the expanding Vienna hub. It had been the ultimate testament to a carrier when a passenger had chosen to fly with it and make a connection at its intermediate hub as opposed to flying nonstop with a national carrier.
As a “second attempt” across the Atlantic, Austrian Airline’s intercontinental A-310 service to New York had ultimately proven successful.
With the acquisition of its third A-310-300, registered OE-LAC, Austrian Airlines had striven to serve a second US gateway in the spring of 1991 and had wished to establish a presence on the West Coast, specifically in Los Angeles, but the A-310-300’s 11-hour flight duration had precluded this reality. Chicago had been alternatively considered, but American’s own nonstop Boeing 767-200ER service to Vienna from Chicago-O’Hare, where it had established its second largest hub, had proven too competitive and Washington-Dulles had therefore been chosen instead.
For the European continental network, a higher gross weight McDonnell-Douglas MD-83 had been scheduled for 1991 delivery and several of the existing MD-81s had been slated for conversion to this standard, thus permitting increased range and/or payload capability. Two further Fokker F.50s had also been on order or option to facilitate increased domestic and long, thin international service.
During the five-year period, from 1989 to 1994, Austrian Airlines had operated independently at JFK, offering as few as four weekly departures during the winter and as many as seven during the summer.
6. Delta Air Lines Code Share
Changing market conditions had necessitated modified strategies at JFK. Seeking to align itself with a US domestic carrier in order to obtain vital “feed” to its transatlantic flights it had been unable to achieve on its own, Austrian Airlines had concluded a marketing agreement with Delta Air Lines in 1994, in which it would place its two-letter “OS” code on Delta-operated flights, while Delta itself would reciprocally place its two-letter “DL” code on Austrian’s services. Two Delta flight attendants, in their own uniforms, had initially also served in the cabins of Austrian’s A-310s to and from Vienna.
Although the concept had slowly reaped financial benefit, the aircraft had ultimately achieved high load factors, carrying both Austrian and Delta passengers from some two dozen US cities through New York to Vienna, often with beyond-travel.
In order to reduce ground-handling costs and attain synergistic, inter-carrier benefits, Austrian Airlines had relocated its operations to Delta Terminal 1A (later redesignated Terminal 2) on July 1, 1994, retaining only nine of its original 21 staff members. Delta Air Lines, the newly-designated ground-handling carrier, had performed arrivals, lost-and-found, passenger check-in, departure gate, ramp, and baggage room functions, while Austrian itself had continued to act within the ticketing, load control, administration, supervision, and management capacities.
Also in 1994, Austrian had taken delivery of the first of two long-range, quad-engined A-340-200s configured for 36 business class and 227 economy class passengers. The two aircraft, which would periodically serve New York throughout the next decade, appeared with the following registrations:
1. OE-LAG
2. OE-LAH
From February 1997 to February 1998, Austrian also relocated its check-in counters and operational office to Delta Terminal 3, but otherwise operated within the same marketing framework.
1997 also marked the first time that the transatlantic route to New York had sufficiently matured to support a second departure on selected days during the summer timetable, with the aircraft arriving at 2045 and redeparting at 2205. Usually operated by aircraft OE-LAC, an A-310 with a reduced-capacity business, but higher-capacity economy class section, the late flight had fostered better connections with the midday bank of departures from Vienna.
7. Atlantic Excellence
Once again yielding to airline deregulation-necessitated realignment and endeavoring to further attain cost-reducing synergies, Austrian Airlines had integrated its JFK operations with Sabena and Swissair on March 1, 1998 under the Atlantic Excellence Alliance, forming the first tri-carrier station. Although the employees of the three carriers had continued to wear their respective uniforms, they had operated from single passenger service and load control offices, utilizing a joint Austrian, Sabena, and Swissair check-in facility, and equally handled each other’s flights. During the peak summer season, seven daily departures operated by four airlines had been offered.
The Atlantic Excellence station had been comprised of eight functions, including Control, Arrivals, Departures, VIP/Special Services, Ticketing, Load Control, Ramp Supervision, and Trouble Shooting. Because Swissair had already been contracted to provide Malev-Hungarian Airlines’ load sheet services, the Load Control function itself had entailed handling some six aircraft types, inclusive of the 747, the A-340, the MD-11, the A-330, the 767, and the A-310, and the Atlantic Excellence integration had often required inter-carrier training courses.
As had singularly occurred with Austrian Airlines, Delta had equally concluded reciprocal two-letter code-share agreements with Sabena and Swissair, but now took the former marketing arrangement to full alliance status at Delta’s significantly-maturing New York-JFK flight hub. Delta continued to provide the ramp and baggage room functions for all three Atlantic Excellence airlines.
In August of that year, Austrian had taken delivery of the first of four longer-range, higher-capacity A-330-200s, registered OE-LAM and configured for 30 business and 235 economy class passengers, and the type had ultimately replaced the workhorse A-310-300 fleet. The four aircraft, later operating with a reduced business class capacity of 24 when the Grand Class concept had been introduced, had included the following registrations:
1. OE-LAM
2. OE-LAN
3. OE-LAO
4. OE-LAP
During the summer timetable of 1998, JFK had fielded its first dual-aircraft type operation, with the first departure standardly operated by the A-330 and the second by the A-310.
8. Star Alliance
Although an ultimate “Swissport Solution,” under which all Atlantic Excellence JFK ground staff would be transferred to the ground-handling company, had been envisioned, the eventuality had never played out. Rumors, rumbling through the station like the gentle forewarnings of a pending storm, had pervaded the atmosphere by mid-1999. A new strategy seemed to loom on the horizon and its seeds, planted long before it had bloomed, had been multi-faceted and omni-encompassing.
1. In June of 1999, Delta Air Lines and Air France had formed the fundamental basis of a new global alliance, later named SkyTeam, thus dissolving the 25-month Austrian/Delta/Sabena/Swissair Atlantic Excellence Alliance whose agreement, without renegotiation, would have expired in August of 2000.
2. Despite an agreed investment limitation of 10%, Swissair had nevertheless attempted to purchase additional Austrian Airlines stock, precluding Austrian’s goal of autonomous identity and independent ownership and forcing it to withdraw from the Swissair-led Qualiflyer Alliance of European carriers.
3. Swissair and Sabena had formed a combined commercial management structure, which again had proven contrary to Austrian Airlines’ independent direction.
4. In early 2000, both Sabena and Swissair had concluded a code-share cooperation agreement with American Airlines, a US airline-alignment counter to Austrian Airlines’ US feed strategy.
Austrian Airlines, a small, but profitable international carrier of considerable quality, had nevertheless needed the reach of a global alliance to remain financially viable and thus concluded a membership agreement with the Lufthansa- and United-led Star Alliance, which had become effective on March 26, 2000. Still the largest and longest-running alliance, it had then been comprised of Air Canada, Air New Zealand, All Nippon, Ansett Australia, Austrian Airlines, British Midland, Lauda Air, Lufthansa, Mexicana, SAS, Thai Airways International, Tyrolean, United, and Varig, and had collectively carried 23-percent of the world’s passenger traffic. At the same time, the decision had permitted continued independent identity and autonomous operation, yet expansion potential for both the airline and its Vienna hub. Expressed as a sentiment, the decision could be stated as, “Here we grow again!”
The transition from the Atlantic Excellence to the Star Alliance, having commenced as early as January 2000, had entailed four integral changes:
1. An entirely new IT (information technology) system and frequent flier program.
2. The operational relocation to a new terminal, passenger service office, passenger check-in counter, load control-aircraft dispatch center, and gate at JFK.
3. New alliance airline code-share flights and traffic feed had resulted in the closing of the Atlanta station and the subsequent opening of the Chicago and reopening of the Washington stations in the US.
4. The company-wide migration training in Oberlaa, Austria.
Star Alliance membership, once again entailing a relocation to Terminal One at JFK, had prompted another handling carrier change, from Delta to Lufthansa, which had now performed the Baggage Services and Passenger Check-In functions, while Austrian itself had continued to act in the capacities of Arrivals, Ticketing, Load Control, Ramp Supervision, and Management. Under a reciprocal agreement, it had also provided these passenger services to Lufthansa for its own Frankfurt departures during non-operational hours. Aircraft loading and baggage room functions had been provided by Hudson General, which had later been renamed GlobeGround North America.
In a further cost-reduction strategy, Austrian Airlines had relocated to a smaller, lower-rent Passenger Service office on the ground floor of Terminal One in September 2002, at which time the Load Control/Ramp Supervision function had been awarded to Lufthansa. No longer serving Lufthansa’s flights, the Austrian staff had been further reduced to six full-time and two part-time positions and the daily shift hours had decreased from nine to eight.
Austrian’s largest-capacity aircraft, the A-340-300–accommodating 30 business class and 261 economy class passengers–had intermittently also provided service to JFK, particularly during the summer 2002 timetable when a late Saturday departure had been scheduled. Two such aircraft had then been in the fleet:
1. OE-LAK
2. OE-LAL
9. Swissport USA
The consistent thrust to reduce costs had resulted in yet another handling-company change at JFK on January 1, 2003, when most of the ground services had been transferred from Lufthansa to Swissport USA.
In preparation for the change, the Swissport passenger service staff had attended the Guide Check-In course in Vienna in December 2002, while one Swissport agent, who had structured the Baggage Services department, had attended the World Tracer Basic course in October of the following year.
Outfitted in Austrian Airlines uniforms, the Swissport staff had performed the Arrivals, Lost-and-Found, Passenger Check-In, Departure Gate, Load Control, and Ramp Supervision functions, while Austrian itself had continued to provide Ticket Sales, Administration, Supervision, and Management services. Load control, which had initially been performed in Terminal 4 using the Swissair DCS system, had been transferred to Terminal One and the Lufthansa-WAB system after the Swissport operations personnel had completed a computerized load control course in Vienna that March.
10. North American Station Training Program
Because most of the Swissport agents had had little previous airline experience; had been unfamiliar with Austrian Airlines’ product and procedures; and had mostly had only a basic, entry-level Passenger Service Course, I had endeavored to create a local training program by drafting the course descriptions, writing the textbooks, devising the quizzes and exams, teaching the courses themselves, and subsequently issuing the training certificates in order to more adequately prepare them to perform their functions.
The program, tracing its routes to the Austrian Airlines Passenger Handling Course created in 1989 and the introductory Load Control material written in 1998, had evolved into the full-fledged North American Station Training Program, whose content, updated in accordance with aircraft, system, procedure, and alliance change, had entailed the four integral curriculums of “Initial Passenger Service,” “Ramp Supervision Certification,” “Load Control Licensing,” and “Airline Management;” and had ultimately encompassed 27 Passenger Service, Ramp Supervision, Load Control, Air Cargo, and Airline Station Management procedural and training manuals; two station histories; 28 curriculums; and 63 courses taught to Austrian Airlines and Austrian Airlines-handling carriers Delta, Lufthansa, Passenger Handling Services/Maca, SAS, Servair, and Swissport at the eight North American stations of Atlanta, Cancun, Chicago, Montreal, New York, Punta Cana, Toronto, and Washington.
The program, which had quickly become the equivalent of an “Airline University” and had often been sited as the reason why Swissport staff had continually striven to transfer to the Austrian Airlines account, had often proven instrumental in their career path advancements, facilitating their promotions or acceptances by other airlines.
11. Boeing and Lauda to JFK
JFK, hitherto exclusively served by Austrian Airlines and its fleet of A-310, A-330, and A-340 Airbus widebody aircraft, had received its first regularly scheduled Lauda Air 767 operation during the summer of 2004, while the frequency had multiplied four-fold by the following year. During 2007, it had altogether replaced the 17-year Airbus service.
Founded in April 1979 by Niki Lauda, of racing car fame, Lauda Air had acquired Alpair Vienna’s charter license for ATS 5 million and had initiated charter and air taxi service in cooperation with Austrian Airlines with two Fokker F.27 Friendship turboprops, predecessors to the Fokker F.50s Austrian Air Services itself had later operated. Niki Lauda, born in Vienna, Austria, in 1949, had amassed his wealth as a Formula I racing driver, having won two world champion titles and 25 Grand Prix races. It had quickly became apparent, however, that two Austrian carriers could not coexist because of fierce competition, downward yield pressure, and an inadequate local market base, and the F.27s had ultimately been leased to Egyptair.
Six years later, in January of 1985, two BAC-111-500s, a British twin-jet not unlike the SE.210 Caravelle in size, range, and design, had been leased from Tarom Romanian Airlines, increasing its fleet capacity to 208 seats, and these had later been deployed on charter and inclusive-tour (IT) services, initially to Greece, but later to other European destinations. Demand became so high that it had ultimately exceeded available capacity and a larger 737-200, leased from Transavia Holland, had replaced one of the BAC-111s, with both types later disposed of upon delivery of two still-higher capacity, new technology 737-300s. These had been operated on a steadily growing charter route network.
In May 1986, Lauda Air had applied to the Austrian Ministry of Transport for a license to operate scheduled international service. This had been approved in November 1987, thus ending Austrian Airlines’ long-held monopoly. A subsequently-acquired, 235-passenger, dual class Boeing 767-300ER had permitted long-range, intercontinental flights to be inaugurated, the first of which, on May 7, 1988, had been a weekly scheduled Vienna-Bangkok-Hong Kong service, shortly joined by a Vienna-Bangkok-Sydney sector. Filling the need for lower-fare, long-haul, leisure-oriented travel, Lauda Air grew rapidly. In 1985, for instance, it had carried 95,768 passengers and had flown 2,522 flight hours with 67 employees, while in the first ten months of 1987, it had carried 236,730 passengers and had undertaken 5,364 flight hours with 169 employees, a 147-percent passenger increase. By 1990, its fleet had swelled to five aircraft, comprised of three 146-passenger 737-300s and two 235-passenger 767-300ERs, which had been deployed on charter services to European destinations such as Spain and Greece, Middle Eastern destinations like Israel, and to Africa and the Far East, and on scheduled services to Vienna, Bangkok, Hong Kong, and Sydney.
Earning its license for European scheduled service on August 23, 1990 for the first time, a right thus far only held by incumbent Austrian Airlines, it had commenced service from Vienna to London-Gatwick with five weekly 737-300 flights.
Seeking entry into the Austrian market, Lufthansa-German Airlines had announced a marketing cooperation with Lauda Air in July 1992, sealing this alliance the following January with a 26.5-percent capital increase, shortly after which the two carriers had inaugurated a quad-weekly 767-300ER service to Los Angeles.
Well aware of competition from Austrian Airlines on inter-European routes from its limited Vienna market, Lauda had sought to inaugurate its own service with small-capacity, 50-passenger, twin-engined Canadair Regional Jets, ordering six of the type in October 1993, which had been deployed on routes to Barcelona, Madrid, Brussels, Geneva, Manchester, and Stockholm with the start of the summer timetable on March 27, 1994. Singapore, which had replaced Bangkok in November of that year, had become the new “bridge” between Vienna and Sydney/Melbourne, and the weekly 767 service had been doubled.
On March 26, 1995, Lauda Air had established a second European hub, Milan-Malpensa, in cooperation with Lufthansa, which now held a 39.7-percent stake in the fledgling Austrian carrier, basing three of the six originally-ordered CRJ-100s there. These had been deployed to Vienna, Manchester, Brussels, Paris, Barcelona, and Dublin. The Candair Regional Jets, along with an increasing number of 737s, had provided the backbone of its European fleet.
It had soon become apparent that pending European deregulation would not likely tolerate dozen-aircraft airlines unless they had served very small, specific market niches. Lauda Air had been unable to survive in the face of competition from Austrian Airlines once before. Both had operated medium- and long-range, twin-engine aircraft from bases in Vienna and had offered considerable passenger service quality. An ultimate cooperation with Austrian Airlines seemed inevitable. This had been partially consummated in June 1996, at which time Austrian Airlines and Lauda Air had operated single-aircraft, dual-code flights to Nice, Milan, and Rome with the regional jet for the first time. On March 12, 1997, this had been expanded, with the announcement of a strategic, tri-carrier Austrian/Lauda/Lufthansa cooperation, Austrian Airlines now taking a 36-percent stake in its former competitor with Lauda himself retaining 30 percent and Lufthansa 20 percent.
On September 24 of that year, Lauda Air took delivery of its second wide body aircraft type, the 777-200, which had been inaugurated into service on the Vienna-Singapore-Sydney-Melbourne route on October 1, replacing the venerable 767.
On September 21, 1999, now one of the three integral “Austrian Airlines Group” members along with Austrian Airlines itself and Tyrolean Airways, Lauda Air had announced its intention to join the Star Alliance, which became effective on March 26, 2000.
As the lower-cost arm within the three-airline group, Lauda Air had provided medium- and long-range scheduled and charter service on leisure-oriented routes with a four-type, 22-aircraft fleet, maintaining its own brand identity. In 2004, however, the first steps toward integration with the Austrian Airlines brand had occurred with the ratification of a joint Austrian-Lauda Air cockpit crew contract, and in January of 2005, aircraft OE-LAE had become the first of four 767-300s to have been repainted in the Austrian Airlines livery, featuring the new interior color scheme and a 24-business class and 230-economy class passenger configuration. Lauda Air itself had reverted entirely to a single-class, high-density charter carrier within the Austrian Airlines Group with a narrow body fleet of Boeing 737s and Airbus A-320s.
The summer 2004 Lauda 767 flight, which had operated as an addition to the daily Austrian frequency during the 11-week period from June 26 to September 5, had arrived at 2055 on Saturday evenings and departed some 25 hours later on Sunday at 2200. In order to prepare the station for the additional service, local Boeing 767 Passenger Service and Boeing 767 Load Control courses had been created and taught to the Swissport staff. Because Lufthansa had not been licensed on 767 aircraft, maintenance had been contracted to Delta Air Lines, which had operated all three -200, -300, and -400 series 767s, and an extensive night stop and security procedure had been performed before aircraft push-back to the Terminal One hardstand, at which time security seals had been applied to all access doors. The inbound galley equipment had been offloaded and washed and prepared for the following evening.
The late departure had proven difficult to sell in the business cabin without considerable marketing promotion and fare reduction because of the aircraft’s then 36-passenger Amadeus Class capacity. Due to the size of its aft, lower-deck door, cargo-pallet loading had been restricted to four positions in the forward compartment. The aircraft themselves had operated in a combination of Lauda Air and Star Alliance liveries.
During the summer 2005 timetable, the 767-300 had operated up to four additional weekly frequencies from June 14 to September 2, resulting in 11 weekly departures from JFK, with the A-330 standardly operating the early service and the 767-300 operating the late flight.
In 2007, the type had altogether replaced the A-330 and A-340 fleet.
12. Centralized Load Control
In late-2006, a concept known as the “Centralized Load Control” (CLC) System had been implemented at JFK, and the station, like the nucleus of an atom, had become the core of it all.
Brainchild of Michael Steinbuegl, JFK Station Manager, the procedure, following trends set by Swiss International in New York, Lufthansa in Cape Town, and SAS in Bangkok, had its origins in an earlier investigative project in which he had explored cost reductions by means of a large, single Centralized Load Control department in Vienna or several regional ones, although the latter inherently carried language and time zone obstacles. Michael, former Aircraft Handling Manager, had amassed considerable experience creating operational procedures and methods, central to which had been weight and balance.
Seeking to apply this knowledge and simultaneously attempting to rectify the system incompatibility and communication difficulties encountered with the SAS-Bangkok arrangement in Washington, he tackled this station first, which, like JFK, already used the Lufthansa-WAB system. In the process, he set the course for the many transitions to come by making several duty trips to establish local station-compatible procedures and then drafting a detailed booklet concerning them. The first centralized load sheet for the Washington flight, OS 094, occurred on November 1, 2006.
Charlie Schreiner, the head of Austrian Airlines Load Control, subsequently marked the occasion with the following words: “With Austrian Airlines Flight OS 094 on November 1, our first line station had been connected to a regular Centralized Load Control process with ULD aircraft. All activities toward the operational flight preparation, load planning, ULD coordination, and WAB System documentation, inclusive of the load sheet transmitted to the cockpit via ACARs, had been successfully controlled by our JFK station yesterday. I would like to thank our colleagues Mike Steinbuegl and Robert Waldvogel for the professional and excellently organized preparation of the CLC procedures, as well as the Austrian ladies, Regula Munz and Eva Lingeman in Washington and the handling agents in JFK and Washington (Swissport and SAS Scandinavian Airlines System) in their engaging work during this transition. This good work had also led to the first flight departing three minutes ahead of its scheduled departure time. I wish all participants continued success in the CLC process.”
The remainder of the CLC program, however, involved phased implementation. In May of the following year, service had been reinaugurated from Chicago. Because this could now be considered a “new” station, it logically followed that its load sheet would be integrated into the CLC system from the start and, despite computer system differentiations, had been successfully adapted with the first flight on May 29 after procedural modifications.
With these cities being handled by JFK, it had been decided to integrate the last North American station, Toronto, whose first centralized load sheet had been issued on July 1.
Three Austrian Airlines-dedicated Swissport Load Controllers, two of whom had worked on a given day during the peak summer season, had formed the Centralized Load Control System team.
Since the fourth station had been integrated, JFK had produced some 120 load sheets per month, and the highly successful system had yielded numerous benefits.
1. It had, first and foremost, produced considerable savings.
2. All flights had departed on time relative to load plan and load sheet preparation.
3. All four North American flights had been operationally handled by only one more daily Load Controller than JFK had had for a single departure.
4. All loading instruction reports and load sheets had been generated in the Lufthansa-WAB system.
5. And Vienna had had immediate access to all load control-related data and documentation.
13. Boeing 777
When Austrian Airlines had turned the page of its winter 2008-2009 timetable on March 29, JFK had fielded its first Boeing 777-200ER operation, the carrier’s largest capacity equipment and the fifth basic type to have served New York after the A-310, the A-330, the A-340, and the 767.
The aircraft, having originally been acquired by Lauda Air, had been configured for 49 business and 258 economy class passenger, although two later examples, which had featured higher gross weights and modified passenger arrangements, had accommodated 260 economy class passengers in ten-abreast, three-four-three, configurations.
During the six-month period between April and September of 2009, the single flight had carried 34 percent more arriving and departing passengers, along with significantly increased complements of cargo and mail, than the comparable year-earlier period, when the 767 had been deployed.
The four 777 registrations had included the following:
1. OE-LPA
2. OE-LPB
3. OE-LPC
4. OE-LPD
14. Lufthansa Acquisition
2009 had been a pivotal year for Austrian Airlines. Because of the global economic downturn, escalating fuel prices, eroding yields, and strong competition within Western Europe from low cost carriers, its financial viability and therefore continued existence as a company had been threatened, despite previously unsuccessful attempts to stem its losses by selling its A-330 and A-340 fleet, reducing its long-range route system, and implementing several restructuring plans. Its savior, in the form of an agreement with Lufthansa-German Airlines to assume its debt and acquire the majority of its shares, had enabled it to continue operating.
On August 28, the European Commission had officially approved the proposed acquisition of the Austrian Airlines Group by Lufthansa-German Airlines, comprised of the 500 million euro restructuring assistance from the state holding company and the merger between the two carriers, thus paving the way toward Austrian Airlines’ integration into the Lufthansa Group by September. In order to achieve the required antitrust immunity, Lufthansa had agreed to relinquish key flight slots and reduce the number of services between Vienna and Brussels, Cologne, Frankfurt, Munich, and Stuttgart. For Austrian Airlines, which would become one of Lufthansa’s many independent, European hub carriers, it had signaled financial survival; an improved economic foundation; cost synergies, such as joint fuel and aircraft purchasing; and access to Lufthansa’s extensive international sales and route network. Austrian Airlines’ own niche within this system had entailed the establishment of Vienna as a high-performance hub for traffic feed to its dense Central and Eastern European route system.
As a result of this ownership change, numerous, fundamental North American changes had occurred.
In Toronto and Washington, for example, agreements had been reached wherein Lufthansa had assumed the ground operations handling at these stations.
In New York, more than half of its Whitestone, North American headquarters, employees had been laid off and the location, for almost a quarter of a century its “fortress” located on the fifth floor of Octagon Plaza, had been closed, with the remaining staff relocating to Lufthansa’s East Meadow, Long Island, facility, and integrating with its staff.
At JFK, Austrian Airlines Cargo had relocated to the Lufthansa facility on November 1, and 16 days later Swissport had passed the ground-handling torch to Lufthansa-German Airlines.
Michael Steinbuegl, Manager of that station for four years, had been promoted to Key Account Manager, North America, but four Ticket Sales-Reservation positions had been rendered redundant when Lufthansa had assumed those functions, reducing the Austrian Airlines’ staff to just three members, all of whom had received limited, six-month contracts which had expired on May 15, 2010. They had subsequently been integrated into the Lufthansa operation and schedule.
The last Austrian Airlines “red presence,” whether having been created by purely Austrian Airlines or Swissport staff, had occurred on November 15, and the first floor office in Terminal One, hitherto “home” for both the Austrian Airlines and Swissport Management, Passenger Service, Centralized Load Control, Ticket Sales-Reservations, and Baggage Services/Lost and Found Departments, had been relinquished for three desks in the Lufthansa facility, two of which had been Duty Manager stations located on the main level and one of which had been the Key Account Manager position located on the lower level in the Station Operations office.
All things seem to come fully cycle. The event, effectively ending 21 years of autonomous Austrian Airlines presence, had marked the carrier’s return to its 1938 integration with Lufthansa and its 2000 ground-handling arrangement at JFK.
15. JFK Station Strengths
Throughout its 21-year presence at JFK International Airport, Austrian Airlines had handled five aircraft types–the Airbus A-310, the Airbus A-330, the Airbus A-340, the Boeing 767, and the Boeing 777; had assumed four strategies–its initial, independent operation; the Delta Air Lines code share agreement; the tri-carrier Atlantic Excellence station; and the Star Alliance integration; had operated from four JFK terminals–Terminal One, Terminal Two, Terminal Three, and the International Arrivals Building; had been handled by three companies–Delta Air Lines, Lufthansa-German Airlines, and Swissport USA; and had used two computer systems.
Because the talents and abilities of many of the staff had been channeled to produce creative and innovative accomplishments during the last chapter of its existence, JFK had notched up several strengths and successes, some of which had enabled it to play an increasingly nucleic role within North America. These achievements can be subdivided as follows:
1. The textbooks and courses had subsequently been used to duplicate this success at Austrian Airlines’ other North American stations.
2. The Centralized Load Control (CLC) Department, entailing the preparation of loading instruction/reports and load sheets for the four North American stations of Chicago, New York, Toronto, and Washington, had been highly successful and had once involved four aircraft types: the Boeing 767, the Airbus A-330, the Airbus A-340, and the Boeing 777.
3. Omar himself had often traveled to other stations in order to restructure their Baggage Services Departments.
4. The Ticket Sales-Reservations counter, under the direction of Sidonie Shields, had consistently collected significant amounts of annual revenue in ticket sales, excess baggage, and other fees.
5. The visible presence of Austrian Airlines, in red uniforms, to the passenger, whether worn by Austrian Airlines or Swissport staff.
6. The special flights, such as those carrying the Rabbi Twersky group, the American Music Abroad group, the IMTX group, the Vienna Boys’ Choir, the Vienna Philharmonic Orchestra, and Life Ball, the latter with its high-profile celebrities, colorful characters, and predeparture parties.
7. The special events, including “The Year in Review,” the Pennsylvania ski trips, the summer pool parties, the birthdays, the Thanksgiving dinners, and the Secret Santas at Christmas.
8. And, finally, the daily briefings, the family atmosphere, the jokes, the laughs, the raps, and the human connection which had continually emphasized the life forces behind it all.
Michael Steinbuegl, who assumed command as JFK Station Manager in September of 2005, had cultivated the environment and orchestrated the steps which had allowed every one of these strengths and accomplishments to have been made.
16. Two Decades of Elasticity
Austrian Airlines, hitherto among the smallest European airlines, had to assume a considerable degree of necessary “elasticity” during its 21 years at JFK, ebbing and flowing in the ever-changing turbulence of prevailing market conditions, seeking financial benefit, synergistic strength, market niche, alliance realignment, and ultimate change of ownership. Defying Darwinian philosophy, whose “survival of the fittest” prediction is often translated as “survival of the largest,” Austrian Airlines had, despite numerous, necessary redirections, proven the contrary, perhaps prompting a rewording of the philosophy to read, “survival of the smallest”–to which should be added, “as a global player.”
Toward this end, the latest strategy had enabled the carrier to survive. For station JFK and its staff, however, it had not.
Epilogue
Because I had been hired by Austrian Airlines two months before its inaugural transatlantic flight from JFK on March 26, 1989 and had held several positions there throughout its 21-year history, I had felt singularly qualified to write its story. It is, in essence, my story. It is what I lived. And what I leave…
A graduate of Long Island University-C.W. Post Campus with a summa-cum-laude BA Degree in Comparative Languages and Journalism, I have subsequently earned the Continuing Community Education Teaching Certificate from the Nassau Association for Continuing Community Education (NACCE) at Molloy College, the Travel Career Development Certificate from the Institute of Certified Travel Agents (ICTA) at LIU, and the AAS Degree in Aerospace Technology at the State University of New York ? College of Technology at Farmingdale. Having amassed almost three decades in the airline industry, I managed the New York-JFK and Washington-Dulles stations at Austrian Airlines, created the North American Station Training Program, served as an Aviation Advisor to Farmingdale State University of New York, and devised and taught the Airline Management Certificate Program at the Long Island Educational Opportunity Center.
