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Lauda disapproves cutbacks

Niki Lauda has warned from making savings at FlyNiki to the expense of customers.

The Viennese businessman, who founded FlyNiki in 2003, told the Kurier: "I would not change anything about FlyNiki as a product. The airline is highly profitable for eight years, but what is happening now should be avoided – a downgrade of the product with a simultaneous increase of prices."

FlyNiki has cooperated with Air Berlin since 2004. Lauda resigned as CEO of FlyNiki to join the administrative board of Air Berlin last year. Reports have it that Lauda – who won the Formula One (F1) championship three times in the 1970s and 1980s – gets just 25,000 Euros a year from Air Berlin for his engagement. Lauda has never disclosed how much he receives for his various advertisement and sponsorship partnerships of the past years.

Lauda attacked Air Berlin bosses for changing the exterior design of FlyNiki while copying the latest austerity strategy of rival Lufthansa. He said: "Lufthansa used to be one of the best airlines. (...) Now they invest less on catering but jack up ticket prices. Air Berlin got infected as they are doing the same."

Now Lauda might have brace for criticism over his failure to stop such decisions. He said in November when he revealed his decision to quit has CEO of FlyNiki that his new role would feature more opportunities to monitor and control procedures. Lauda also underlined at that time that he had no intention to leave the aviation business.

FlyNiki had 3.4 million passengers in 2010, significantly more than in 2009 when 2.6 million people booked FlyNiki flights (2011: 4.5 million). Air Berlin is in a serious economic crisis in contrast to its Viennese cooperation partner. Germany’s leading low-cost carrier sustained losses of 272 million Euros in 2011.

Former Deutsche Bahn (DB) boss Hartmut Mehdorn – who succeeded Joachim Hunold as head of the airline in September 2011 – showed an optimistic attitude nevertheless. He announced last March: "Air Berlin is alive. We will be back in the black next year."

Mehdorn was initially considered as a temporary solution as Air Berlin head. Now there are more and more indicators suggesting that the German could remain in the hot seat for some years. Air Berlin received an important boost only a few weeks ago when booming Arabian carrier Etihad Airways decided to increase its interest in the company from three to almost 30 per cent.

Lauda said after it emerged that Hunold would leave Air Berlin that he was "convinced" Air Berlin would soon recover. "I don’t think it is an extraordinary occurrence that Air Berlin experiences difficulties. The important thing is to take the right measures to lower the costs," the ex-F1 ace told the Salzburger Nachrichten.

Lauda became active in the aviation industry in 1979 when he founded Lauda Air. The airline achieved fast growth before plunging into the red. Austrian Airlines (AUA) acquired a stake of 36 per cent in Lauda Air in 1997 before jacking up its share to 88 per cent in 2001 – one year after Lauda resigned as Lauda Air CEO. Lauda Air is still part of the AUA Group. The carrier headed by Jaan Albrecht, Peter Malanik and Karsten Benz uses Lauda Air to carry out charter flights.

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Tag cloud:
ndash  Viennese  resigned  Hunold  flights  FlyNiki  carrier  Germany  rsquo  product  airline  Lauda  founded  Berlin  Lufthansa  businessman  Euros  aviation  prices  Mehdorn

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