Comment: Aging long-haul AUA fleet vs. modern Boeing 787-9

Boeing 777 (Photo: Jan Gruber).
Boeing 777 (Photo: Jan Gruber).

Comment: Aging long-haul AUA fleet vs. modern Boeing 787-9

Boeing 777 (Photo: Jan Gruber).
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A perennial favorite for many years: the aging long-haul fleet of Austrian Airlines and its possible successor. Never before have the management of Lufthansa and its Austrian subsidiary made such concrete statements. So it should be the Boeing 787-9, but when it will be delivered is still open. The vast majority of the existing long-haul fleet comes from an order placed by Niki Lauda.

The long-haul fleet of Austrian Airlines is getting on in years, but there are also operators in Europe and even within the Lufthansa Group who have older aircraft on the AOC. The "problem" of the aging AUA long-haul fleet is not so much in the "now" but in the future.

The comparison presented below for illustration is greatly simplified: Similar to a car, maintenance costs also increase with age. Here and there a part breaks that needs to be replaced and the scope of the necessary work is becoming more and more extensive. In addition, older vehicles tend to consume more fuel than younger ones. In the case of aircraft, the expenses for professional maintenance and kerosene are of course significantly higher than for a motor vehicle, but are basically comparable.

Boeing 767-300ER (Photo: Jan Gruber).

At some point it just gets too expensive

Most airlines cannot pay for aircraft with available cash, instead financing them through loans or alternatively opting for leasing. Older machines that have been paid off for them cause neither leasing installments nor loan repayments. This block of costs is eliminated. Similar to a car: When the loan has been paid off, you save on monthly payments. So, as long as maintenance and fuel costs don't skyrocket, operating an older type can be cheaper than a new aircraft, whether financed or leased.

The emphasis is on "can". There comes a point when modern machines are cheaper to operate than older ones, despite capital costs for loans or leasing installments. Especially in times of rising fuel costs, this point in time occurs much earlier. Thus, the advantage of the paid-off aircraft is lost and has become practically worthless, because in addition to the higher kerosene consumption, older aircraft also have higher maintenance costs.

Austrian Airlines is currently at exactly this point and the older the long-haul fleet gets, the less economical it becomes. So it is no coincidence that the oldest Boeing 767-300ERs were phased out in the wake of the corona pandemic, because they not only pushed the average age up significantly, but also the costs. The fact that, for example, the OE-LAW was recycled, i.e. scrapped, is no coincidence, because even in the cargo area, the providers rely on younger used vehicles or new builds for cost reasons.

Average age of the existing AUA long-haul fleet:

TypeAge in years
B77722,24
B76724,52
Total Long Haul Fleet23,00
Boeing 777 (Photo: Jan Gruber).

Pure point-to-point long-haul routes from Vienna would be uneconomical

Both Austrian Airlines and Lufthansa have known for a long time that the long-haul fleet needs to be renewed. However, this is not really a "must" because the Kranich Group is not seriously dependent on the Vienna-Schwechat hub. It would be a trifle to divert the previous non-stop long-haul routes of Austrian Airlines to the hubs in Munich, Zurich, Frankfurt and "Brussels" operated by sister companies. There would be little or no loss of connectivity, but there would be a certain loss of prestige, because the Austrian capital would then no longer be accessible non-stop from many places.

Other carriers would quickly pick the "raisins", but the probability that an airline would base long-haul aircraft in Vienna and be active to a comparable extent as Austrian Airlines is today is low. There is a very simple reason for this, which is often forgotten in such speculation: Openskies agreements do not exist with all target countries. On some routes it is necessary to have an Austrian AOC or one from the other country, and it is often the case that bilateral agreements determine which airlines in the two countries are allowed to fly on which route.

This puts the Lufthansa Group in a very advantageous negotiating position with the Austrian government. This has often been demonstrated in connection with the long-haul fleet. For example, one could negotiate a reduction in the ticket tax from a federal government, which was withdrawn a few years later, and long-distance connections were also an issue in the course of the Corona aid. In theory, the state or a private entrepreneur could also bring a new airline into the air and "replace" the AUA long-haul route. Without a corresponding feeder network, however, this will end in bankruptcy, because today's AUA long-haul routes cannot live from the Austrian market alone. Pure point-to-point long-haul routes from Austria would be very difficult to operate since the market is considered to be highly seasonal. Switchers from other markets ensure stability.

Boeing 767-300ER (Photo: Jan Gruber).

Delivery slots have yet to be “found”.

Industry experts have known for a long time that the aging long-haul fleet of Austrian Airlines urgently needs to be renewed in the next few years. From a purely technical point of view, the machines could certainly be operated for another ten or even 15 years, because when it comes to maintenance, AUA is a company with the best competence. By the end of this decade at the latest, there will no longer be any economic viability in operation. Kerosene costs are not expected to fall, but rather to continue to rise. And who knows, maybe at some point there will be a tax on top of that and then every gram that you can save counts.

In the meantime, AUA boss Annette Mann and Lufthansa general director Carsten Spohr have made it clear that the decision has been made in favor of the Boeing 787-9. In this pattern you can see the future of long-haul routes from Austrian Airlines. In terms of fuel economy, this type is rated significantly better than the current fleet, which by the manufacturer's design draft is even older than the machines that fly. In other words: The Dreamliner contains insights that were not even known when the Boeing 767 or 777-200 was planned.

But one thing is also clear: the B787 in particular is a model that many airlines want to have and as soon as possible. It is now also up to the negotiating skills of the Lufthansa Group to get delivery slots for Austrian Airlines as early as possible. This also includes being able to take on orders from "broken airlines" or buyers who don't want the machines after all. The fact that Lufthansa is capable of doing this has been proven with the incorporation of the former “White Tales” into its own flight operations.

Boeing 777 (Photo: Jan Gruber).

Boeing 767 fleet: Niki Lauda's "legacy" at Austrian Airlines

While Lauda Air relied on Boeing 767 and 777 for long-haul routes, Austrian Airlines used A330 and A340. In the course of merging the flight operations, the ex-AUA aircraft were separated in favor of the ex-Lauda Air aircraft. All Boeing 767-300ERs currently in service with Austrian Airlines were ordered and taken over under Niki Lauda.

The OE-LAE was delivered to Lauda Air in 2000. Originally named "Louis Armstrong", the aircraft was transferred to Austrian Airlines' AOC in 2005 and is currently part of the AUA fleet as the "Vienna Boys' Choir".

In 1998, Lauda Air took over OE-LAY, initially flying as “Steve McQueen”. This aircraft is now called "Japan" and was transferred to Austrian Airlines in 2005.

The OE-LAZ was used by Lauda Air from 1999 under the name "Frank Sinatra". Also in 2005, the long-haul aircraft was handed over to Austrian Airlines and now flies on AUA routes as “India”.

Typereg.Age in years
B767-300(ER)OE-LAE25,64
B767-300(ER)OE LAY24,27
B767-300(ER)OE-LAZ23,64
Boeing 767 (Photo: Austrian Airlines / Peter Thier).

Boeing 777-200: Two "used", three with Lauda Air history

Even in the area of ​​the Boeing 767-300, which is larger than the B777-200ER, the Lauda Air past cannot be denied to this day. The machines with the identifiers OE-LPA, OE-LPB and OE-PLC were still delivered to the company founded by Niki Lauda and joined Austrian Airlines in 2005. The OE-LPD, on the other hand, was handed over to the AUA directly from the factory. The machines OE-LPE and OE-LPF were previously used by other carriers and were purchased second-hand from the Austrian Lufthansa subsidiary.

In September 1997, Lauda Air took over OE-LPA, which was christened "Pablo Picasso". This machine has been part of the AUA fleet since 2005 as the "Sound of Music". In 1998, the OE-LPB "Ernest Hemingway" joined Lauda Air before it was moved to AOC by Austrian Airlines in 2005 and has been in the air as the "Heart of Europe" ever since.

The OE-LPC was flown to Lauda Air in March 2022. At that time, the long-haul aircraft was christened “Sir Donald Bradman”. This Boeing 777 has been in service with Austrian Airlines since 2005 under the name "Dream of Freedom". The OE-LPD was handed over to Austrian Airlines ex works in January 2007 and bears the baptismal name "Spirit of Austria".

In 1998 today's OE-LPE was delivered to Aeroflot. After the stopover at Vietnam Airlines, this Boeing 777 has been part of the AUA fleet since March 2014 and is christened “Blue Danube”. The machine delivered to Varig in 2001 with the current registration OE-LPF was also used by Aeromexico before it was handed over to Austrian Airlines. The plane was christened “Sibanye” by Austrian Airlines.

Typereg.Age in years
B777-200(ER)OE LPA25,64
B777-200(ER)OE LPB24,48
B777-200(ER)OE LPC21,01
B777-200(ER)OE LPD16,15
B777-200(ER)OE LPE24,81
B777-200(ER)OE LPF21,34
Boeing 777-200 OE-LPA (Photo: V1Images.com/Aron Teppert).

3 Comments

  • EDI, 8. March 2023 @ 08: 51

    Sorry

    But I don't quite agree with this comment.

    Lufthansa would have preferred to stamp out the long-haul route in Vienna, but there was immediately great demand from other providers who are just waiting for Vienna to be given up as a long-haul route by LH. Because then the Star Alliance HUB VIE will no longer be able to assert itself and Vienna would switch to the Multi Alliance HUB or to another alliance and the influence of LH would quickly diminish.

    And sorry, but the Austrian market is quite large and LH doesn't want to voluntarily leave it to the competition. And I'm writing that as a Swiss... I know how important the Austrian market is for Swiss. The many HONs who live in the Vienna area should not be underestimated, and the Austrians also make up a very large proportion in our first class.

    In other words, another airline is currently trying to offer a small HUB from VIENNA with LONG DISTANCE, and that wouldn't happen if the market didn't exist. You also look at the passenger numbers…. Where VIENNA is already ahead of us in Zurich, even though we have more than 30 long-haul machines (including Edelweiss) in Zurich.

    That's why I really don't understand the eternal downplaying of the Austrians, yes, even their own journalist downplays everything.
    That would never happen here in Switzerland.

    So, sooner or later….. The LH Group is suddenly under pressure in Vienna and that's the only reason the long-distance story suddenly starts to move.

  • MK Air , 8. March 2023 @ 13: 44

    The AUA long-haul will probably be reduced to North America. Plus a few classic seasonal leisure destinations (Mauritius, Maldives, Cancun, etc.). This would also be consistent with the stated number (7-9) of new long-haul aircraft.
    Destinations in Asia (China, Japan, India, Thailand, Singapore) can be covered by the respective locally based Star Alliance partners if required. Even an AUA with a larger long-haul fleet would not head for destinations other than the hubs of the Star Alliance partners. Or does anyone seriously believe that AUA would fly to Manila, Jakarta or Kuala Lumpur or even Dhaka. The times for these destinations are long gone from Vienna.
    In any case, Vienna plays no role for Africa or South America. With the existing hubs and the new Rome and Lisbon hubs that may be added in the future, the LH Group is well positioned for South America and Africa. Should an SAA get back on its feet, it can also serve Vienna in the same way as the Asian companies.
    Therefore, 7 to 9 long-haul aircraft (B787-9) for the AUA would be a good decision, both for VIE and for the business location.
    In general, it would be desirable for other long-haul airlines (e.g. Vietnam Airlines, Sri Lankan, Air New Zealand, Chinese airlines) to settle in Vienna soon. However, this does not seem very likely at the moment.

  • Walter, 9. March 2023 @ 13: 43

    Question to the experts, why isn't the A321LR/ULR suitable for some less frequented AUA long-haul destinations?

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3 Comments

  • EDI, 8. March 2023 @ 08: 51

    Sorry

    But I don't quite agree with this comment.

    Lufthansa would have preferred to stamp out the long-haul route in Vienna, but there was immediately great demand from other providers who are just waiting for Vienna to be given up as a long-haul route by LH. Because then the Star Alliance HUB VIE will no longer be able to assert itself and Vienna would switch to the Multi Alliance HUB or to another alliance and the influence of LH would quickly diminish.

    And sorry, but the Austrian market is quite large and LH doesn't want to voluntarily leave it to the competition. And I'm writing that as a Swiss... I know how important the Austrian market is for Swiss. The many HONs who live in the Vienna area should not be underestimated, and the Austrians also make up a very large proportion in our first class.

    In other words, another airline is currently trying to offer a small HUB from VIENNA with LONG DISTANCE, and that wouldn't happen if the market didn't exist. You also look at the passenger numbers…. Where VIENNA is already ahead of us in Zurich, even though we have more than 30 long-haul machines (including Edelweiss) in Zurich.

    That's why I really don't understand the eternal downplaying of the Austrians, yes, even their own journalist downplays everything.
    That would never happen here in Switzerland.

    So, sooner or later….. The LH Group is suddenly under pressure in Vienna and that's the only reason the long-distance story suddenly starts to move.

  • MK Air , 8. March 2023 @ 13: 44

    The AUA long-haul will probably be reduced to North America. Plus a few classic seasonal leisure destinations (Mauritius, Maldives, Cancun, etc.). This would also be consistent with the stated number (7-9) of new long-haul aircraft.
    Destinations in Asia (China, Japan, India, Thailand, Singapore) can be covered by the respective locally based Star Alliance partners if required. Even an AUA with a larger long-haul fleet would not head for destinations other than the hubs of the Star Alliance partners. Or does anyone seriously believe that AUA would fly to Manila, Jakarta or Kuala Lumpur or even Dhaka. The times for these destinations are long gone from Vienna.
    In any case, Vienna plays no role for Africa or South America. With the existing hubs and the new Rome and Lisbon hubs that may be added in the future, the LH Group is well positioned for South America and Africa. Should an SAA get back on its feet, it can also serve Vienna in the same way as the Asian companies.
    Therefore, 7 to 9 long-haul aircraft (B787-9) for the AUA would be a good decision, both for VIE and for the business location.
    In general, it would be desirable for other long-haul airlines (e.g. Vietnam Airlines, Sri Lankan, Air New Zealand, Chinese airlines) to settle in Vienna soon. However, this does not seem very likely at the moment.

  • Walter, 9. March 2023 @ 13: 43

    Question to the experts, why isn't the A321LR/ULR suitable for some less frequented AUA long-haul destinations?

Leave a Comment

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This website uses Akismet to reduce spam. Learn more about how your comment data is processed.

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