AUSTRIA'S TWO largest airlines, Lauda Air and Austrian, have decided to end years of in-fighting with a plan, to co-operate in some areas.

The two airlines have been talking for several months, according to Lauda president and chief executive Peter Thoele, and have now agreed to co-operate, initially through code-sharing arrangements on at least three routes, from Vienna to Rome, Milan and Belgrade.

"Austria is a relatively small market, but very productive," says Thoele, adding that he believes that international alliances "...are the only way forward today". He admits, however, that Lauda, traditionally a long-haul airline, had been in "direct confrontation" with Austrian since it opened European services with the introduction of the 50-seat Bombardier Regional Jet two years ago.

The proposed alliance will "...start slowly until we determine whether it is feasible or not", Thoele adds.

Thoele says that Lauda is a "successful low-cost airline" which has been profitable for three years, with a profits increase of 8% to Sch47 million ($4.5 million) in 1995. There are "no plans" to increase the regional-aircraft fleet. "The Austrian deal is the limit of our present planning," he says.

Source: Flight International