The History of Lauda Air

Lauda Air, the second carrier after Austrian Airlines itself to establish a presence in Vienna, had a history of both competition and cooperation with it.

Andreas Nikolaus “Niki” Lauda, the son of a paper factory owner, who forged a very different path than his father when he won the first of three Formula One world racing championships at 26-years-old, capitalized on his notoriety and invested his wealth in an airline that bore his name, Lauda Air Luftfahrt AG.

Acquiring Alpair Vienna’s charter license for ATS 5 million in April of 1979, he commenced charter and air taxi service in cooperation with Austrian Airlines with two Fokker F.27 Friendships.

It quickly became apparent, however, that it could not coexist with incumbent Austrian in such a small home market, and the F.27s were consequently leased to Egyptair.

Entering a partnership with Greek financier Basile Varvaressos, owner of the ITAS travel agency, six years later, he leased two BAC-111-500s, a British twin-jet not unlike the SE.210 Caravelle and Douglas DC-9 in size, range, and design, from Tarom Romanian Airlines, increasing his fleet capacity to 208 seats in the process and operating them on charter and inclusive-tour (IT) services to Greece and other European destinations.

So high did demand become, however, that it soon exceeded capacity and a larger 737-200, this time acquired from Transavia Holland, replaced one of the BAC-111s. Still later, both types were superseded by two even higher-capacity 737-300s, which were operated on a steadily growing charter route network.

In May of 1986, Lauda Air applied to the Austrian Ministry of Transport for a license to operate scheduled international service for the first time. Approved in November of the following year, it signaled the end of Austrian Airlines’ long-held monopoly and a subsequently obtained, 235-passenger Boeing 767-300ER, featuring both business and economy class cabins, facilitated long-range, intercontinental flights. The first, occurring on May 7, 1988, consisted of a single weekly frequency from Vienna to Hong Kong via Bangkok. It was later supplemented by a Vienna-Bangkok-Sydney sector.

Inextricably tied to the management of the airline that bore his name and frequently taking the left seat of his aircraft as the pilot that he was, he sought to differentiate it and hence attract passengers with quality, offering “Amadeus,” instead of simply “business,” class; catering his flights with cuisine from the highly esteemed DO & CO restaurant in downtown Vienna; featuring triangular shaped, porcelain plates during their in-flight service; and toting it all with the slogan, “Service is our success.” It was.

But his signature style was expressed in several other ways, including high expectations of his employees, uniforms that included the red baseball caps and blue jeans he himself wore, a mandatory flight attendant retirement age of 38, and aircraft named after movie stars, singers, and artists, such as Bob Marley, John Lennon, Louis Armstrong, Ray Charles, Elvis Preseley, Janis Joplin, Greta Garbo, Gregory Peck, Pablo Picasso, and Ernest Hemingway. One, reflecting his own passion, naturally bore the designation “Enzo Ferrari.”

Flamboyant, charismatic, and a racing hero who had also won 26 Grand Prix championships, he was perhaps the Austrian equivalent of Richard Branson.

Filling the need for lower-fare, long-haul, leisure-oriented travel, Lauda Air grew rapidly. In 1985, for instance, it carried 95,768 passengers and flew 2,522 flight hours with 67 employees, while in the first ten months of 1987, it carried 236,730 passengers and undertook 5,364 flight hours with 169 employees, a 147-percent passenger increase. catering

By 1990, its fleet consisted of five aircraft–three 146-passenger 737-300s and two 235-passenger 767-300ERs–all of which were operated on charter services to Europe, Africa, and the Middle and Far East. The scheduled routes remained those between Vienna, Bangkok, Hong Kong, and Sydney.

Subsequently earning its license for European scheduled flights on August 23, 1990–a right thus far only held by flag carrier Austrian–Lauda Air inaugurated service between Vienna and London-Gatwick with five weekly 737-300 frequencies. But growth attracted more than passengers. It also attracted other airlines.

Because Lufthansa saw its growing presence in the Austrian market and its East European route access as potentially lucrative assets, it announced a marketing cooperation with Lauda Air in July of 1992, (which was initially envisioned as an offensive move against the aborted Austrian Airlines, KLM, SAS, and Swissair Alcazar Alliance), sealing the agreement the following January with a 26.5-percent capital increase, by means of its Condor charter carrier, shortly after which the two airlines inaugurated a quad-weekly 767-300ER service to Los Angeles. “Partner of Lufthansa,” advertising the arrangement, appeared on Lauda’s aircraft.

The fledgling Austrian carrier, no longer just a shadow of Austrian Airlines, was now aligned with a company far larger than itself and its initial, dual-aircraft fleet quickly quadrupled, now encompassing four narrow body 737s and four widebody 767s, operating between Munich, Miami, and Los Angeles with Condor equipment.

Painfully aware of competition from Austrian Airlines on scheduled inter-European routes, Lauda circumvented what would have resulted in low 737 load factors by ordering six 50-passenger Canadair CRJ-100 Regional Jets in October of 1993 to operate them.

Deployed to Barcelona, Madrid, Brussels, Geneva, Manchester, and Stockholm, they marked the start of the summer timetable, which became effective on March 27, 1994. Singapore, which replaced Bangkok in November of that year, served as its new “bridge” between Vienna and Sydney/Melbourne, and the weekly 767 service was doubled. By the fall it served 11 scheduled and 42 charter destinations.

On March 26 of the following year, Lauda Air established a second European hub, Milan-Malpensa, in cooperation with Lufthansa, which now held a 39.7-percent stake in the fledgling carrier, basing three of its six CRJ-100s there and operating them to Barcelona, Brussels, Dublin, Manchester, Paris, and Vienna. The Canadair Regional Jets, along with an increasing number of 737s, became the backbone of its European fleet.

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