July 17, 2018 / 9:33 AM / 2 months ago

IAG's Level airline plans budget long-haul flights from Vienna

VIENNA (Reuters) - British Airways parent IAG (ICAG.L) plans to expand its long-haul network from Vienna with new budget brand Level, Chief Executive Willie Walsh said on Tuesday.

British Airways logos are seen on tail fins at Heathrow Airport in west London, Britain, February 23, 2018. REUTERS/Hannah McKay

Most budget airlines offer short-haul routes, but Level was established last year to offer low-cost long-haul flights, joining a handful of other airlines in this relatively new market, including Norwegian (NWC.OL).

“One of the reasons we chose the Level brand to operate from Vienna (is) that we are looking for opportunities to further expand long-haul flights,” Walsh said at a news conference in Vienna to launch Level, adding that a decision on the new routes had not been taken yet.

But Level will initially fly short-haul routes from Vienna where it will compete with Europe’s biggest low-cost carrier Ryanair (RYA.I).

Vienna Airport (VIEV.VI) has been trying to attract budget carriers with an incentive scheme in the aftermath of the collapse of Air Berlin.

FILE PHOTO: The logo of Vienna's airport is seen in Schwechat, Austria May 28, 2018. REUTERS/Heinz-Peter Bader/File Photo

Budget airlines which have launched or increased services in Vienna in the past few months include easyJet (EZJ.L), Lufthansa’s (LHAG.DE) Eurowings, Budapest-headquartered Wizz Air (WIZZ.L), and IAG’s own short-haul low-cost carrier Vueling.

Aviation industry experts have already started speculating that there might eventually be casualties in such a crowded market.

Walsh said: “We would not do this if we weren’t convinced this is for the long term.” He said the Austrian market was still under represented and under served and that its short-haul budget brand Vueling would continue to fly from Vienna.

IAG initially agreed to buy former Air Berlin’s Austrian business Niki before it lost out to Niki Lauda.

Level will start operating from Vienna with four leased Airbus A321, which were part of Air Berlin’s insolvency estate, and plans to increase its fleet to 30 within the next five years, Walsh said.

Its 14 European destinations include routes which are already served from the Austrian capital such as Palma de Mallorca and Barcelona.

IAG has already ordered more aircraft for its carriers and is currently in talks with Boeing (BA.N) and Airbus(AIR.PA) about buying more planes for its long-haul fleet, Walsh said.

The group can chose between several options to buy or lease aircraft, according to Walsh. A decision was not expected before the first quarter of 2019.

Reporting by Kirsti Knolle; editing by Jason Neely and Jane Merriman

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