Once the economic development of Central and Eastern Europe, Austrian Airline focused on this area, the flag carrier of Austria operates schedules services to 48 destinations in this area. “Our actual strategy is very much based on secondary markets, thus opening new economic regions in Eastern Europe, the main target of foreign direct investments and of corporate relocations,” Viorel Nica, sales support & marketing manager of the company stated to Wall-Street.
If Central and Eastern European market is a landmark for Austrian Airlines, Romania is therefore, one of the most important destinations in the area, Austria being one of the biggest foreign investor in Romania. “At present we operate schedule services to 6 destinations in Romania, Bucharest, Baia Mare, Timisoara, Cluj, Iasi and Sibiu, accounting for 65 weekly flights that link Romania to our hub in Vienna,” he added.
Of all six destinations in Romania of Austrian Airlines, the company commenced services to Baia Mare in April 21 with three flights a week. “The reasons why we started services to Baia Mare as our sixth flight destination in Romania are the following: this city has become a very important center in car industry, and its location near Satu Mare, a major target for Austrian investments,” Austrian Airlines representative said.
According to him, the 73.7% growth of fuel price, the fierce competition with low-cost segment together with economic crisis are the main factors that make 2008 a very challenging year. ”If in first quarter 2008, costs on fuel rose 19% compared to similar interval of 2007, mounting to 249.5 million euros, in the second quarter the costs amounted to 140.5 million euros, namely 30.1% growth compared to previous year,” said Viorel Nica.
Austrian Airlines’ market share in Romania is 9% up 2% from 2007. The group estimates 70-90 million euros turnover in 2008.
MyAir: In summer, passengers’ number increase
Even if in the first half this year, operating profit of the low-cost operator was slightly over zero, the second half of the year had a better start, in June and July MyAir transporting almost 100,000 passengers. “In July transported 42,000 passengers, while in July the number increased to 51,000,” said Antonio Iervolino managing director for Romania of the Italian operator.
In this period there are tourists who go on vacations abroad, but also Romanian workers who come in Romania in the summer vacations.
In January-September 2008, MyAir transported 400,000 passengers on Romania-Italy route , the law-cost operator’s objective being to exceed 500,000 passengers by yearend.
MyAir operates schedule services to Italy (Bergamo, Venice, Rome, Bologna, Bari, Napoli, Catania, and Milan and France (Paris), operating no less than 68 flights from/to Romania. “Flights to Italy are the most profitable, destinations such as Bari, Catania, Napoli, Bologna and Venice being the most successful”, Iervolino added.
If at this point, MyAir has an average occupancy rate of 75%, routes to Romania exceed this value, reaching to 80% down from 2007.
easyJet: 135,000 passengers in first year in Romania
After analysis and market researches, the first company in Europe that developed low-cost business pattern, easyJet, has decided in September 2007 to enter the local market, the first route being Bucharest-Milan. In their first year in Romania, the company transported 135,000 passengers from/to Romania “MyAir operates daily schedule services Bucharest-Madrid and five times a week Bucharest-Milan route,” said Peter Voets, easyJet Marketing Manager Austria, Switzerland and Eastern Europe.
IATA forecasts 3.9 billion euros loss
International Air Transport Association announced after first half this year that in 2008 profit margins of airline companies will drop drastically, even losses, in context of record high fuel prices.
If price of crude oil remains at 135 US dollars per barrel during the rest of the year, losses of airline industry are likely to climb to 3.9 billion euros”, said Giovanni Bisignani, managing director of IATA.
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