Austrian cuts Mumbai service, S7 continues takeover interest

29 Oct 2008 by Mark Caswell

Austrian Airlines
is dropping flights to Mumbai owing to the weakening Indian economy, the crisis
in European financial markets, and “drastic overcapacity between European
airports and the city”.

The five-times weekly flights from Vienna had been reduced from a daily service earlier this year, and the route will
cease entirely on March 1, 2009. The news follows the recent dropping of its
long-haul route to Chicago earlier this year, as well as short-haul flights to
London City, Luxembourg and Riga.

Meanwhile Russian
carrier S7 Airlines (formerly Siberian Airlines) is continuing its interest in
Austrian. A statement released today said the airline has sent letters to government
holding company OIAG, detailing “the principles on which S7 would be interested
in investing in it [Austrian Airlines]”.

S7 is Russia’s
largest domestic airline, and any merger or takeover with Austrian would enable
it to leverage the carrier’s extensive network between Vienna and Eastern
Europe. Lufthansa has also been linked with a takeover of Austrian over the
last few weeks, and it will be interesting to see if this changes following today’s
takeover of Bmi by the German carrier (see online news October 29).

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Report by Mark

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