Lufthansa subsidiaries Austrian Airlines and LCC Eurowings Europe are in talks to expand a wet-lease contract from Jan. 1, 2020.

Under the new strategy—and to better position themselves in the Austrian market—Austrian Airlines will take over Eurowings Europe’s network planning at the Vienna hub and will wet lease four Airbus A319s/320s from the LCC beginning Jan. 1.

“We are already in talks to wet lease even more than four planned aircraft to Austrian. Nothing has been decided yet. This is a learning process for both sides,” Eurowings Europe Robert Jahn told ATW in Salzburg.

Some aircraft will operate from Vienna on routes with strong demand—including Barcelona, Birmingham, Nuremberg, Rome and Zadar—that are currently served by Eurowings Europe.

Eurowings Europe has bases in Vienna, Salzburg (Austria), Palma de Mallorca (Spain) and Munich (Germany). “We have a total of 700 employees [and] 19 Airbus A319s/320s. Seven aircraft are based in Vienna,” Jahn said.

“We only do wet-lease operations for [Lufthansa Group members]. However, Vienna is the most competitive market; it is difficult for everyone,” Eurowings managing director and CCO Oliver Wagner said.

Crew costs for Eurowings Europe are 20% lower than crews for Austrian Airlines, a source close to Eurowings told ATW. Palma-based crews have a 10%-15% lower cost compared to Vienna-based crews. “A Palma-based Eurowings Europe crew would have up to 35% lower costs compared to Austrian Airlines crews,” the source said.

Eurowings Europe will expand its Salzburg base from one to three Airbus A319s in summer 2020, creating a total of 600,000 seats in Salzburg. The second A319 is expected to arrive in March 2020 and a third A319 will be based from May 2020. “We expect a load factor of 80%,” Jahn said.

In total, the carrier will operate 15 routes from Salzburg to Dusseldorf,  Berlin Tegel, Hamburg and Cologne (Germany); Lamezia Terme and Olbia (Italy); Kos, Rhodos, Karpathos, Corfu and Heraklion (Greece); Antalya (Turkey); Palma de Mallorca (Spain); Hurghada and Marsa Alam (Egypt).

“To develop a new route, we estimate that it should become profitable after 18 months. Ideally, we will start a new route in summer,” Wagner said.

Austrian will close its Salzburg base, transferring one Embraer E195 to Vienna. Austrian’s current 28X-weekly Salzburg-Frankfurt service was transferred to Lufthansa Dec. 1.

Kurt Hofmann,