IAG is setting up a base in Austria to compete with Ryanair, easyJet, Eurowings, Laudamotion and WizzAir.
Vienna base with 30 aircraft
IAG CEO Willie Walsh is in a hurry to get on the low-cost long-haul market and picks up the glove in Austria. IAG’s low-cost long-haul arm LEVEL is to grow its base in Vienna to 30 aircraft.
LEVEL will have 15 aircraft by 2020 and the remaining 15 to be in place by 2023.
IAG has a return of capital requirement for its airlines around 12-15 percent annually, LEVEL’s operations in Austria shall be profitable by the end of 2019.
What is the attraction by the LCC to establish themselves in Austria
The main reason is the Austrian government have understood that a large route network and competition among the airlines provides good revenues for Austria, tourism and the business community. To achieve this the government has introduced an attractive commercial framework and incentive scheme for the airlines, these tools reduces the total costs for airlines to operate into Austria and enables them to offer low fares. This has already been a success as all the major LCC’s in Europe have established themselves with bases in Vienna, Ryanair, easyJet, WizzAir, Eurowings, Laudamotion, Veuling and LEVEL.
Austria is strategic located
LEVEL will have a conservative growth with strong focus on costs and rentability, its manager for Austria, Laut Frank Glander said to Austrianaviation.net. LEVEL is starting up with five aircraft and 14 destinations, one of the aircrafts is actually a spare in case problems arise. Vueling, another IAG LCC brand will continue to operate on Vienna, but it will not compete with LEVEL, he continued.
LEVEL and Vueling are here to stay in Vienna and Austria is strategic located in Central- Europe for both short/medium and long-haul operations, together with an airport that has capacity to handle the increased volume of flights and passengers.