Austrian Airlines Posts €94M Loss, Cuts Vienna-Graz Route
Austrian Airlines swung further into the red in the first half of 2026, as sharply higher fuel costs tied to the war in Iran pushed the airline’s losses past €94 million, more than double what it lost over the same period last year.
The Lufthansa subsidiary announced the results on Tuesday, alongside a decision to cut its long-running Vienna-Graz route once the winter flight schedule begins. The domestic connection will fly for the last time on October 23.
A war far from home hits fuel bills at home
CEO Annette Mann said the Iran war had hit the airline hard, both through sharply higher kerosene costs and the route cancellations that followed. Higher ticket prices only partially offset the financial impact through June, she said. Without the airline’s fuel-price hedging measures already in place, the losses would have been substantially worse.
The route cut is aimed squarely at controlling costs: the Vienna-Graz connection has been unprofitable for years, and management pointed to it as one of the clearest places to cut given the pressure on the balance sheet.
Regional airports and businesses push back
The decision drew immediate criticism from Graz’s aviation sector. Wolfgang Grimus, head of Graz Airport and vice president of the Austrian aviation association AÖV, warned that the Vienna-Graz link had been an essential part of international business connections for many companies. Losing routes like this costs time, he said, and potentially costs future contracts too.
Mann acknowledged the tension, saying regional airports need long-term structural solutions rather than routes propped up indefinitely at a loss.
The numbers behind the headline loss
Despite the loss, the picture wasn’t uniformly negative. Revenue rose 4 percent year-on-year to more than €1.2 billion, and passenger numbers climbed 6 percent to nearly 7 million. The second quarter (April to June) performed better than the first, though EBIT still fell 74 percent year-on-year in that period, landing at a positive €18 million rather than turning negative.
Management said demand over the summer has been strong and that the airline has managed to push ticket prices higher, a factor it expects to help offset costs through the rest of the year.
Looking ahead
Despite the first-half loss, AUA’s management still expects the airline to close 2026 with a full-year profit, citing a combination of partially passing higher costs on to customers and internal efficiency measures. Fleet renewal is continuing despite the cost pressures: two new Boeing 787-9 Dreamliner long-haul aircraft are due for delivery later this year, bringing the airline’s Dreamliner fleet to five, alongside further deliveries of new Airbus aircraft already planned.
The Vienna-Graz cut adds to a broader pattern of route rationalization the airline has pursued in recent years as it works to return its short-haul domestic and regional network to profitability, even as its long-haul and international network continues to grow.
