LONDON – The Ryanair Group has announced that Laudamotion (OE) will cease operations by the end of the year.
Instead, there is going to be an Air Operator’s Certificate (AOC) by the name of Lauda Europe.
Ryanair’s Austrian subsidiary was ready to resume flights from Vienna International Airport (VIE) as of July 1, 2020.
Reasoning for The Change
The statement that Airways has received goes over a plethora of reasons for this change in thinking.
Lauda Europe will allow German and Spanish based cabin Crews to pay income and social taxes in their respective countries.
The Austrian government did not provide any payroll support for these crews despite paying these taxes to the Austrian government.
“Lauda Europe, with an Airbus AOC, will offer greater flexibility to the Ryanair Group. It will open up bases across Europe without the penal restrictions imposed by Austria’s income tax system,” the statement said.
Support from Regulators
It did however acknowledge the guidance given by the Austrian authorities.
“Laudamotion GmbH and Lauda Europe wish to acknowledge the strong support and guidance they have received from the Austrian Regulator (ACG) over the past two years of operation”.
“Lauda Europe looks forward to working with both ACG and the CAD to ensure a smooth and efficient wind-down of Laudamotion GmbH operations, and the opening up of Lauda Europe operations from November. “
Ryanair Group Plans
The airline will operate wet lease operations, like with Laudamotion, with services expect to inaugurate by November this year.
The Group stressed that all passengers booked on Laudamotion flights will not be unaffected by the closure of the airline.
The AOC will fly within Malta, with the continued focus on Airbus A320 operations.
A Loss for the Austrian Government?
This move may also not come as a surprise. The Austrian Government implemented the Flugabagegesetzes (Flight Taxation Act). Basically, it means a tax of €40 for all flights.
The Government even stated that airlines must close all routes if covered by train in two and a half hours.
For Laudamotion, some of these flights were essential for revenue generation.
A New Approach to the Austrian Market
However, moving ahead to Malta, Lauda Europe can continue to focus on the Austrian market.
However, it will do so not in the way it had intended to. The flight tax will be against the carrier’s idea of low-cost travel.
In time, it will be interesting to see where Lauda Europe goes with this and what sort of services will be on offer coming out of Austria going into the near future.