Bavarian regional airline Augsburg Airways, wholly owned by Germany’s Haindl family, hopes to approach break-even margins by the end of this year following a massive restructuring effort. Begun March 29 with a contract to revamp a six-year-old marketing relationship with Lufthansa Airlines, the overhaul has resulted in the loss of some 140 jobs and the grounding of five airplanes. But thankfully for airline stakeholders, Augsburg has managed to adjust its costs and capacity to counter the E20 million decline in revenue it suffered last year, perhaps marking the end of one of the most painful periods in its illustrious history.“Our future is now secured,” proclaimed Augsburg chairman Manfred Scholz, who predicted that the German domestic market will resume annual growth of between 4- and 6 percent starting in 2004. “We want to take part in that growth as a part of Lufthansa, delivering passengers to Lufthansa’s main hubs,” notably Munich, Hamburg and Frankfurt.
The former head of finance and personnel of one of Europe’s largest paper companies, Haindl GmbH, Scholz replaced colorful CEO Olaf Dlugi before Augsburg implemented its new exclusive agreement with Lufthansa on June 1. A Team Lufthansa member since 1996, Augsburg now wet-leases its entire active fleet of four Bombardier Dash 8Q-400s and eight 50-seat Dash 8-300s as part of an ACMI (aircraft crew maintenance insurance) arrangement under which Lufthansa controls all marketing, sales and route planning.
