Augsburg slashes fleet, staff as Lufthansa takes over

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German flag-carrier Lufthansa is tightening its grip on Team Lufthansa franchise partner Augsburg Airways in a shake-up which will see its staff and fleet drastically cut.

The airline, owned by parent company Haindl Papier, has released only some details of the rationalisation but people familiar with the situation say the fleet will be cut from the current 18 to only 12 aircraft and more than 20% of the staff will go - including managing director Olaf Dlugi, who has already been replaced.

Star Alliance member Lufthansa is set to take over all of Augsburg’s sales and marketing activities and all flights will now carry the ‘LH’ flight code. Augsburg’s ‘IQ’ code is being dropped and, from the beginning of next month, Augsburg will see its on-board service harmonised with that of Lufthansa.

Augsburg – the first Team Lufthansa franchise partner – will now operate entirely under a wet-lease arrangement for Team Lufthansa, reducing its fleet by about one-third to four Bombardier Q400 and eight Q300 turboprops.

All the changes are still subject to regulatory approval by the German competition authorities.

Some 120 of the 540 personnel are being axed during the restructuring exercise; managing director Olaf Dlugi has been succeeded by Manfred Scholz, the former CEO of Haindl Papier.

Scholz says that the closer integration with Lufthansa will allow Augsburg to reduce its costs, pointing out that this is an “absolutely necessary step” to secure the long-term existence of the carrier.

The airline carried 891,000 passengers last year of which 80% were on Lufthansa routes. But these services have suffered badly from the economic crisis, with traffic falling by around 10%.

Augsburg, which currently serves more than 20 cities inside Germany and Europe, will continue to operate services from its home base as well as its hubs at Munich and Hamburg. Scholz says: “The decision to move into a new structure – taken in light of 11 September and a change in market conditions – gives us a solid base for development of our company in the future.”

Last week Lufthansa’s Star Alliance neighbour Austrian Airlines announced that it will consolidate its two regional subsidiaries – Rheintalflug, which also flies as Team Lufthansa, and Tyrolean Airways – into a single operation from 1 January 2003.