Earlier this week, the government of Austria has made an important announcement that it is prepared to sell its 43 percent stake in the Austrian Airlines, the flagship carrier of the nation. Just a couple of days following the announcement, it appears that there is a very serious contender wishing to purchase the said stakes of the company. The Reuters news agency has reported that Turkish Airlines is contemplating on a move to submit a bid for Austrian Airlines. The Turkish Company's chief executive, Temel Kotil pointed out that his carrier was highly interested in principle in the Austrian Airlines. However, he quickly added that so far no concrete decision has been arrived at whether the company would submit a bid in this regard.

With Austria setting 24th August as the deadline for any investor to submit their bid, Turkish Airlines is forced with the situation to make a decision in this regard rather quickly. According to media sources, Turkish Airlines appears to be one of a small group of foreign airlines that might be entertained to partner with Austrian Airlines. Over and above, Air France-KLM also appears as a possible contender. On top of any other airline, Lufthansa appears to be the first choice, which according to several Austrian politicians is a possible buyer of the shares owned by the state. Notably, the total value of the stakes held by the government in Austrian Airlines is about 157 million euros.

In a significant move to rescue the Alitalia, arrangements have been made to inject about EUR1 billion euros from private investors. Il Giornale has reported this on Wednesday without citing any sources.

Notably, the paper is owned by the brother of Prime Minister Silvio Berlusconi. The paper has said that the investors are actively taking part in the rescue plan designed for the airline. Intesa Sanpaolo, is the government-appointed adviser for drafting this plan.

Il Giornale noted that the highlight of the plan is to seek to raise Alitalia's 40 percent share of the domestic market, by way of taking in 22 percent share of Air One, a smaller domestic rival.

Amidst several uncertainties and challenges hovering over the issue of rescuing Alitalia from doom, the government of Austria is trying its best to see that the airline continues to remain the national carrier of the country. In this regard, the government seems to be highly particular in limiting the percentage of held by foreign investors. In a statement made today, the government confirmed that it will try its best to invite a domestic investor in addition to assuring its stand against privatising the airline until the right individual or organisation comes forward to purchase the maximum share of the company. Till this announcement came recently, most analysts had the notion that the government is bent upon selling the airlines at the nearest possibility and that finally Lufthansa-Germany's flag carrier-might end up with purchasing a major stake.

However, according to the new scenario, even if the new approach succeeds in solving the faction existing within the government, the condition has made the selling of the airline a bit more difficult. According to the present development, the government means to control around 25 percent stake of the company along with aligned local investors, even after privatising 43 percent of the shares owned by the state. Amidst this situation, several foreign bidders like Lufthansa for instance might learn that with a quarter of the stakes, the government and Austrian interests will have a considerable leverage so as to block certain vital decisions regarding operations.

In a recent statement, the transport minister has insisted that the government of Austria and a group of banks should keep not less than 25 percent stake in Austrian Airlines. According to the opinion of Minister Werner Faymann, leader of the Social Democrats, the airline is said to be highly important for Vienna Airport and for being the decisive factor for attesting the ability of Austria to attract businesses, which according to him was vital to retain influence.

Faymann strongly noted that the government, which presently owns a 43 percent of Austrian Airlines and a group of Austrian banks, which holds 7 percent together, must retain 25 percent between them in order to retain a vetoing minority stake. Once this is ensured, it would limit the stake available for sale to only 25 percent.

Faymann said, "Austrian Airlines should remain a strong Austrian airline. This requires a corresponding influence, which I want to be secured when a strategic partner is chosen."

A recent report published in Die Presse on Friday has noted the indication given by the management consultants advising the Austrian government and Austrian Airlines that Lufthansa, the German based carrier would prove to be the best choice for taking-over the financially troubled airline.

The management of Austrian airlines has taken the Boston Consulting Group's assistance in analyzing a good number of cooperation scenarios. The report in Die Presse notes that apart from Lufthansa the only viable partners suggested by the group were Aeroflat, the Russian Air Carrier. 

Also, Austrian Airlines expects to close the year 2008 with a net loss of 70-90 million Euros, which was brought about to a great extent by rising fuel costs.

A recent report published in a newspaper states that Royal Jordanian Airlines is all set to propose an offer on the government's stake in the troubled Austrian Airlines during the beginning of this week.

Quoting some of the sources, Wiener Zeitung, a major Austrian newspaper has also said that the privately owned Royal Jordanian Airline has commissioned PricewaterhouseCooper for advising the airline regarding the stand it should take on bidding for the shares of the Austrian Airlines.

Though there is a good deal of buzz in the newspapers in this regard, Royal Jordanian has not made any comment yet in this regard. On the other hand, the holding company for the Austrian government was also not ready to comment on what has been stated in the said newspaper article. But, interestingly, a spokesperson detailed that any such agreement pertaining to the sale of government's stake in the carrier is not something that could be discussed publicly until a government mandate is issued to sell the shares.

According to a statement made by the junior transport minister on Monday, the co-governing Social Democrats of Austria have expressed their strict opposition to the quick sale of the 43 percent stake held by the government in Austrian Airlines, the junior transport minister said on Monday.

With the soaring prices of fuel haunting the airline industry, OeIAG the holding company of the Austrain government has hired Boston Consulting and Merrill Lynch to evaluate the strategic options for Austrian Airlines.

On the other hand, there have been strong reservations among several segments as to how and when the plan is to be implemented. Answering the question by the national radio ORF as to whether there would be a mandate for OeIAG to sell the stake or part of it even before the snap elections of Austria scheduled on 28th September, Christa Kranzl, the junior minister said, "I personally cannot imagine that. I warn against a rushed sale. There are negative examples in the past... where there were overly hasty privatization."

During a recent statement, Austrian Airlines AG has reported that the number of travelers flying on almost all of its routes fell during the month of June 2008 by 1.6 percent when compared with the figures noted during the same month last year, notably working out to slightly over one million passengers. On the whole, according to the figures released by the airline, the load factor for the month of June stood at 73.6 percent. This was again about 1.3 percent lower than that of the figures obtained for the month of June 2007.

However, interestingly, on short- and medium-haul routes, the passenger numbers increased in during the month of June by 1.7 percent year-on-year. This was largely due to the European Football Championships conducted during that season in Austria and Switzerland.

The hardest hit among all segments was the volume on the long-haul services, which remarkably fell about 5.8 percent from last year. For this condition, the economic condition in the US has been blamed in addition to the tightened visa requirements for traveling to China during the weeks before the start of the Olympic Games in Beijing.

Some reports published in "News", the Australian Journal state that Air China might express its interest in purchasing some stakes in the Austrian Airlines. Most notably, this news follows the recent media news that the Austrian government is looking forward to sell of its stake in the carrier as the company has only showed a loss during this year and had great difficulty in adjusting with the tough business climate prevailing all around in the travel industry.

According to the report published in the Chinese magazine, Kong Dong, Air China's chairman had said that he would explore the possibility of getting the Chinese carrier purchase a stake in the Austrian Airlines. At present, Austria is attempting to sell off it 43 percent share in the company. However, it is not clear whether the government will hold some of the stakes or totally give off all the stakes held in its position. Merrill Lynch, the global financial giant is already into the process of searching for the suitable buyers who shall be interested in holding the stakes of the Austrian Airline.

According to the recent indication given by the chairman of Air china, there is still a modest chance that the carrier would seek to buy the stakes in Austrian Airlines. Other than this, he did not indicate clearly as to how this move shall be executed. According to him, Air China would certainly take interest in the deal provided it helps their customers.

Austrian Airlines cooperating with Air China, the future Star Alliance, is offering daily flights to the Shanghai city via Beijing. This is as a consequence of the three new codeshare destinations, that bring before its passengers, flights to Shanghai, Wuhan and Guangzhou everyday. It is in effect from Friday, July 13, 2007.

The codeshare flights are now operating daily to Wuhan, in Central China and to the southern Chinese city - Guangzhou, via Beijing. In the month of July, Austrian has also brought for its passengers, 42 new flights a week flying between Austria and China. This is an addition to the already existing daily services to Beijing.

The operation of this new route will be highly beneficial for the customers. Shanghai, Wuhan and Guangzhou have good growth opportunities economically and the people travelling on business using this route will be in an advantageous position. This cooperation will help the Austrian Airlines Group in the extension of its global network and provide its customers the best connections out into China through Beijing that are possible.

According to the present year's survey of the German magazine, 'Capital', Austrian Airlines was judged the best airline in Europe alongwith Swiss. The topmost airlines in Europe have been assessed by the readers and the online users of the magazine. The assessment of the best European airlines have been made in an array of categories and among them, the Austrian airlines was chosen as the best airline in Europe.

Austrian Airlines had scored the highest points in most of the categories. It won in the fields of catering, service and punctuality. It secured a second position in the Seating Comfort, Price-Performance and Bonus Programme categories.

After the all round judgment, Austrian Airlines was honored as the best airline in Europe coupled with Swiss.

Continuing its expansion of the route network, Austrian Airlines will be including the capital city of Kazakhstan, Astana in its flight schedule. Beginning on September 4th, 2007, there will be three new flights every week to Astana as per schedule. A Boeing 737-700 will be used for the routes in compatibility with Air Astana.

The Vienna hub will be offering the suitable connections into the global route network of the Austrian Airlines Group. This should be a great boon for the passengers.

The Chief Commercial Officer for Austrian Airlines, Dr. Josef E. Burger states that the incorporation of Astana helps in the extension of the Focus East strategy, as Astana has sustainable growth potential. Austrian Airlines shows interest in extending their scope of action in the newly independent, Central Asian states.

Austrian Airlines is planning to augment its capacity from Mumbai to a daily service from November 2007 and is looking at adding Chennai to its network in the first half of 2008 followed by Bangalore and Hyderabad. The airline, which commenced operations to India in 2005, currently offers six flights from Mumbai and a daily service from Delhi.

"Initially, when we started operations, we wanted to consolidate our position in Mumbai and Delhi, which will happen by the end of this year. Talks are on with the government for the Chennai operations are we are looking at five flights out of the city," informed Amey Amladi, General Manager, Western and Southern Region, Austrian Airlines.

The airline has also enhanced capacity to Chicago by increasing the number of flights to six from last week and also increased the number of seats to 36 from 30 in the Business Class. It has reduced the number of seats in Economy Class to 189 from 209. The focus of the airline is on the corporate traveller as it has introduced flat beds last month on board its refurbished Boeing 767, which will service the Indian routes from later this month.

Just in time for the start of the summer season, passengers throughout the Austrian Airlines Group are now being treated to the DO&CO catering service. DO&CO will also be responsible for meeting the culinary needs of guests at Austrian Lounges at Vienna International Airport in future. The new move sees the airline reach another major milestone in its quality and service offensive.

Chief Executive Officer Alfred Ötsch said the following at the presentation of DO&CO catering: Â'Our guests will not only have the opportunity to enjoy the new DO&CO catering from 15 June, but also notice innovative new details on a regular basis. DO&CO is well-known for setting innovations throughout the industry, recognising trends and developing its catering in a highly creative manner. This includes inspired visual presentation as well as charming and sometimes surprising details.

Although a great deal will be changing on a step-by-step basis, the typically Austrian character and specific national focuses in the catering will continue to be central to the inflight service of the Austrian Airlines Group. This will enable us to offer our passengers Â'gourmet entertainmentÂ' in addition to gastronomy of the highest standard, putting clear blue sky between ourselves and the competition.Â'