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Vienna airport expects LCC consolidation

Vienna International airport has seen a boom in low-cost carriers after the collapse of Air Berlin and its local unit Niki in 2017, but its chief operating officer expects that some form of consolidation will occur soon.

The Austrian capital has become a hotbed of LCC competition, with the emergence of Ryanair's Lauda and IAG's Level. Wizz Air, meanwhile, has signalled that it intends to grow its Vienna base to15-20 aircraft within the next five years.

The airport's chief operating officer Julian Jager says that after the loss of Air Berlin, "a lot of low cost carriers discovered Vienna as a potential market and they are fighting now for the number two position" next to Austrian Airlines.

But he expects that there will be some rationalisation in the boom of low-cost capacity in the near-term.

"I would not be surprised if we see a certain consolidation – maybe next year, maybe the year after. I think that's normal with growth like that," he says.

As is, the situation appears unsustainable with the newer players discounting fares to build up their market share.

"We are seeing right now ticket price levels which are not sustainable," observes Jager. "I think it's obvious now that everyone went into the market, they have to position themselves and gain market share, but it is not sustainable in the long run. That is why there will be, one way or the other, consolidation and this does not bother us."

While the low-cost boom has helped to deliver passenger growth, Vienna has also benefited from the expansion of Austrian and the wider Lufthansa Group, as well as strong inbound tourism from Asia.

"Overall I think this is a reflection that Vienna is becoming a more and more attractive market. I think it is an attractive incoming tourism market, and at the same time the Austrian economy is doing well, and therefore it is a strong outgoing market as well," says Jager.

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