Dream or nightmare? Brexit win or lose for Austria?
Styria, Austria’s automobile manufacturing hub, could benefit from Japanese British-based car makers relocating to the southeast Austrian region. But the southeastern Austrian region could also face its own Stygian nightmare if car supply chains are destroyed in a no-deal scenario.
“The region of Styria has an important position for the economic relationship with the British. Jaguar Land Rover started building cars there in 2017, which has been a tremendous boost to the Austrian economy,” Barbara Kolm, director of the Austrian Economics Institute, told The Local, commenting on the growing car hub around the city of Graz.
“Austria will probably be hit less by Brexit than many other EU member states – the German ifo Institute expects a relatively modest decline of GDP of 0.1 percent because of Brexit,” added Kolm.
Nearly 50 per cent of all Austrian exports to the UK are in manufacturing. And it is Austria’s car industry that is perhaps most exposed to the roulette effects of Britain’s departure from the European Union.
“The only sector that might profit from Brexit is the car industry, especially in Styria,” Barbara Kolm told The Local. “Jaguar Land Rover could outsource even more of its production to Austria after Brexit, and the industry hopes to be able to lure Toyota to Austria as well. Fiat Chrysler has already announced that it will move its production of tractors to Styria.”
But Brexit could also turn out to be a two-edged sword for Austrian car makers. “All of this could just as easily go wrong as well, for example if Jaguar Land Rover instead were to decide to move completely back to Britain in the long run,” added Kolm.
Austria has a trade surplus with the UK and more than 100 Austrian companies are nevertheless active in the UK market – “among them Novomatic, Wienerberger, and Zumtobel,” adds Kolm.
Alpine states such as Salzburg, where tourism is a key industry, could feel a heavier Brexit burden. Nearly one million Brits, mainly winter ski tourists, visit Austria each year.
“Especially during the winter months in the Alpine regions, tourism is of substantial scale and must not be neglected,” Kolm told The Local. British visitors constitute the 4th largest visiting national group in terms of overnight stays.
Seasonal Businesses in Travel (SBIT) is a lobby group of more than 100 British tourist operators, created in response to Brexit, that aims to “increase awareness of the potential impact of Brexit on the UK outgoing travel industry,” through lobbying of “UK and European governments.”
When it comes to financial services however, experts agree that Austria is unlikely to win or lose much in the battle to lure financial services firms from the UK.
Vienna has also emerged as a potential new low-cost aviation hub in light of Brexit. EasyJet announced that it will operate its new airline easyJet Europe out of Vienna. All of the budget carrier’s EU27 aircraft hope to be re-registered at the new hub by March 2019.
Ryanair is also looking to Austria as a post-Brexit stepping stone to the European market, having taken a stake in LaudaMotion, the low-cost airline founded by Austrian former Formula 1 world champion and airline pioneer Niki Lauda, reports The Local Austria.
Beyond the challenges in each sector, Austria’s current coalition government could also be an unpredictable force in the Brexit negotiations.
On July 1, Austria – traditionally a mainstream, moderate, member state – will take over the revolving six-month EU presidency.
Austria is most likely to use its term at the presidency to exert pressure on its neighbours rather than to get any special Brexit concessions, says Grieveson. While Germany is calling for all member states to make a larger contribution to the post-Brexit EU budget and fill the deficit left by the UK’s departure, Austria is reluctant to do so.
With regards to Brexit, the rights of Austrian citizens in the UK and Brits in Austria remain a quagmire issue. More than 10,000 Brits live in Austria, according to the Austrian national statistics agency Statistik. Approximately 25,000 Austrians live in the UK.
Source: The local
Ryanair to buy into Niki Lauda’s Austrian airline.
Ryanair said it has agreed to pay the sum for a majority 75-percent holding in Vienna-based LaudaMotion from the former Formula One motor racing champion.
The Dublin-based group will also invest another 50 million euros in start-up and operating costs for the first year and hopes to reach profitability within three years.
“Ryanair Holdings Plc today announced that it has entered into a binding agreement with Mr Niki Lauda to support his plan to develop and grow LaudaMotion GmbH,” it said in a statement.
“LaudaMotion is an Austrian AOC (air operator’s certificate) holder owned by Niki Lauda, which has recently acquired many of the assets, including A320 aircraft, of the former Niki Airline.”
The Irish company will initially acquire a 24.9-percent stake and this will climb to 75 percent, subject to EU regulatory approval.
LaudaMotion carrier will meanwhile start a range of scheduled and charter services from Germany, Austria and Switzerland primarily to Mediterranean leisure destinations, it added.
“I am thrilled that in the partnership with Ryanair, LaudaMotion will be able to establish itself as a strong competitor and to grow quickly and sustainably,” said chairman Niki Lauda.
“A new player in the aviation market is born and I am looking forward to offering our passengers an extensive route portfolio at competitive air fares.”
Ryanair chief executive Michael O’Leary added that the move would allow LaudaMotion to “grow more rapidly as it seeks to compete in a market which is dominated by Lufthansa’s high air fares with its Swiss and Austrian subsidiaries”.
“This LaudaMotion partnership is good news for Austrian and German consumers/visitors who can now look forward to real competition, more choice and lower fares.”
Lauda’s business nous and combative nature away from the track saw him establish Lauda Air before selling it to Austrian Airlines in 1996. He then founded Niki, but sold it to Air Berlin in 2011.
The sports personality Lauda returned to the aviation sector in 2016 with the purchase of top-end carrier Amira Air, which he renamed Lauda Motion.
The world-famous driver then won a dramatic takeover race for Niki, the airline he had founded in 2003 before ceding to the now-defunct Air Berlin.
Source: The Local.
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