Austrian Completes Biz Class Revamp, Eyes U.S. Corps.

<B>Austrian Completes Biz Class Revamp, Eyes U.S. Corps.</B>

By David Jonas

Austrian Airlines by today was expected to complete improvements on its long-haul hybrid first-class/business-class cabin. The new product is central in the carrier's strategy to add U.S.-based corporate clients. Meanwhile, Austrian is progressing with Star Alliance integration and soon will launch a new Internet booking engine.

The refreshed business cabin includes an extra foot of leg room--accomplished by reducing the number of seats from 30 to 24--more recline, new swivel reading lamps, modernized individual entertainment systems and a gourmet menu selection. Austrian in 1994 was one of the first carriers to eliminate traditional first class and transition to a single premium cabin, a concept since emulated by numerous airlines.

Guenter Hude, general manager of the Americas, told BTN the refurbished product is "a perfect tool" to help Austrian achieve a larger share of high-yield business traffic. The carrier already has more than 150 U.S.-based corporate accounts, but hopes to quadruple that number through its Star Alliance affiliation. "Joint corporate agreements within the Star Alliance will happen, but it will take time," Hude said. "Tracking revenue figures across the alliance has been one of the bigger problems. We are not as far along as we should be, considering how long the alliance has existed."

Hude added that existing agreements with the American Expresses and Carlson Wagonlit Travels of the world also will need to be updated.

Austrian, however, only joined the Star Alliance last year and understands the need for patience, especially as a smaller carrier in a 15-member group dominated by United Airlines and Lufthansa German Airlines. However, frequent flyer programs and baggage handling already have been integrated, and in January the carrier received the go-ahead for antitrust immunity with United Airlines, Lufthansa and SAS.


<B>Austrian Avoids Economic Obstacles</B>

Despite a weakened economy affecting business traffic at several U.S. carriers, Austrian said its high-yield traffic in the first quarter increased 7 percent to 8 percent year over year. "However, we do fear that corporations will reduce expenditures in the premium cabins," Hude said. The overall transatlantic load factor is around 70 percent, a figure Hude hopes will increase through joint pricing and feeder development within the Star Alliance.

Aside from working in conjunction with its Star brethren, Austrian is focusing on increasing corporate sales within the United States by emphasizing Austria as an appealing destination. That strategy includes a push in corporate incentive and convention business and a new offer to business travelers seeking to extend their trips. A program dubbed "Vienna On Us" provides any business traveler paying full fare to any point beyond Vienna with a complimentary stayover in Vienna, including luxury car service, five-star hotel accommodations and meals.

Austrian early next month expects to launch a new booking engine on its Web site following an ongoing beta test. Access to corporate negotiated rates, a development with limited use in Austria, will not be included.

Austrian offers nonstop flights between Vienna and Chicago, New York JFK and Washington Dulles, using A330 and A340 aircraft with an average age of just under five years. Five weekly flights between Toronto and Vienna will start April 28. Austrian also code shares on 36 United routes and is negotiating with Air Canada for more codeshares north of the border.

In Europe, Austrian owns all of Tyrolean Airways and a majority stake in Lauda Air, forming the Austrian Airlines Group. Austrian said its Vienna hub still has the shortest connection times in Europe, and that an expansion project there is in the works.