Fierce competition forces Austrian Airlines to quit Dubai service
Austrian Airlines, part of Lufthansa Group, yesterday said it would stop direct flights to Dubai amid mounting competition.
The decision to axe the 19-year-old route coincides with a European Commission review of aviation policy that will focus on competition issues. “The overcapacity, built up in recent years, resulted in fierce price competition as up to 800 seats per day were on offer,” Austrian Airlines said. “This ultimately made the Vienna-Dubai route unsustainable for Austrian Airlines.”
The carrier said that Lufthansa Group passengers would still be able to reach Dubai by flying from Frankfurt, Zurich or Munich.
Austrian Airlines will operate its final Vienna-Dubai flight, a route it has flown since 1996, on September 13. The last flight from Dubai to Vienna will be the following day.
Peter Morris, the chief economist at Ascend, said other mid-size carriers flying to Dubai face similar challenges.
“Even with connections offered by Austrian beyond Vienna into European destinations, many of those cities are connected directly with Dubai already, and premium passengers always prefer to cut out a stop if they can,” said Mr Morris.
The expansion of Arabian Gulf carriers across Europe has hurt some legacy carriers and has triggered complaints from companies such as Lufthansa that claim regional rivals have benefited from state subsidies.
In March, the transport ministers of Germany and France asked the European Commission to address alleged government subsidies to Arabian Gulf carriers, which Lufthansa and Air France-KLM claimed disrupted “fair competition” in the market.
But the big Gulf carriers have faced more concerted attacks in the US, where Delta, United and American Airlines are engaged in a high-level lobbying war against their big three Gulf rivals.
“The US airlines now also see the consequences of the billion-dollar supported growth of Gulf carriers, said Lufthansa in a policy document published in June.
Europe’s big five carriers last month joined forces to lobby for a new EU aviation policy to cut passenger taxes and limit strike disruption.
The chief executives of Europe’s five largest airline groups – Air France-KLM, easyJet, the British Airways parent company International Airlines Group, Lufthansa and Ryanair – met last month in Brussels to agree on key recommendations.
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Published: July 20, 2015 04:00 AM