THE AIR BATTLE OF VIENNA

Niki Lauda was forced to retire from the presidency of his own airline in December 2000

Shortly after winning a non-championship race at Imola in his Brabham Alfa Romeo BT48, Niki Lauda had retired from active competition for the first time of his career during the practice for the 1979 Canadian Grand Prix, when the parmalat Brabham team had switched back to Ford engines for better reliabilty. Having a new 2 million US-$ contract in his pocket, Lauda had not found enough challenge anymore for staying in the motor racing business. Already in his Ferrari days Lauda had passed the exams for his professional flying license and then he had entered the company of his fellow Austrian Dr Polsterer that had been a charter flight airline.

But Lauda, the pioneer, wanted more. Only some time later he founded an airline of his own with two propeller-driven Dutch Fokker Friendship. But the conditions for founding a company in Austria were as bad as possible that time. A strong bureaucracy with foolish laws did everything to prevent Lauda from challenging the the state-owned AUA (Austrian Airlines). High taxes and fuel costs and also a deep recession in most industrial country gave him no chance to expand on the sector of passenger flying. So he decided to enter the cargo field, bought an option for a DC9, but because of high interest he had no chance to buy it really, so he was happy to sell the option again without dramatic losses. A lot of intrigues were made against Lauda, who had come from a very wealthy Vienna family, but being a self-made millionaire in Formula One.

Two years after his first retirement Lauda came back to Grand Prix racing being in deep need for money, because the airline lost huge sums that made him decide to freeze the future. He joined the McLaren team for the following four years and his third title, won under dramatic circumstances, made him so popular all over the world comparable only to the Pope or the President of the United States of America. At the end of the 1985 season Lauda made his final retirement from Grand Prix racing.

Economic conditions had become much better now and Lauda also had been able to take legal action for getting the license for scheduled flights to make his company earning money. Lauda brought his company into the Vienna stock exchange, later he sold a package of 36 per cent of the shares to German Lufthansa. Still a small firm with only 25 planes, 70 pilots and 1200 employčes overall in action, Lauda Air became one of the world`s finest and exclusive airlines. But his personal only earned about 50 % of the wages normally paid in the European flying business and had to work twice as hard for it.

But very soon tragedy came to the way of Lauda Air, when one of their Boeing 767s, being only one and a half year of age, exploded over the jungle of Thailand because of a defect reverse. 223 people were killed, but Lauda`s personal integrity and technical competence saved the small airline from breaking down. In spite of the accident the company became able to increase their profits the following years until 1998. For a more solid base meanwhile Lauda had decided to sell a 35.9 per cent package to his former rival AUA becoming the major shareholder with Lauda`s private foundation holding 29.0 and Lufthansa 20.0 per cent, while the rest of 15.1 per cent was widely spread. That constellation later should be the great mistake.

For the first time being involved in the international markets of scheduled flying, Lauda Air made losses of 75 millions US-$ in the year 1999. The strong American currency and the weakness of the Euro, meanwhile introduced also in Austria, combined with rising fuel prices were the reasons. The same time the Lauda Air personal opted for wages as high as being paid by AUA and Lufthansa. Lauda himself, as the president of the company being responsible for all their financial affairs, wanted to rehabilitate them by deep cuts into their budgets, but the management of the AUA did not want to follow that reasonable way. The employčes expressed their threat to bring the trade unions into the firm, a step always had been avoided by Niki Lauda personally throughout the history of the enterprise. The AUA management had not forgotten, that Lauda had challenged their formerly state-owned airline two decades before to make Lauda Air the only Austrian airline making profits for many, many years by keeping the costs low and rising the customers`service onto a top level - a thing they theirselves never had been able to succeed in. For this reason they spun a lot of intrigues against Lauda personally having their main goal in mind, and that was to take over the majority. That aim they reached, when Lufthansa declared their option to sell their 20 per cent package to AUA. Niki Lauda had to recognize, that he had lost the air battle of Vienna being out of power now. He retired from the position of the chairman of Lauda Air but wanted to stay in the company as a pilot of their Boeing 767s and 777s. But the AUA did not do that favour to Austria`s best known celebrity in the world - they fired him immediately.

Meanwhile Niki Lauda has taken over the presidency of Lauda Air Italia, where he is the major shareholder. For his Milan company he also works as a pilot to keep his license alive. "Difficulties make me awake," he said to German news magazine DER SPIEGEL in October 2000. He is absolutely right.

J H

 

 

© 2001 by researchracing

 

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