Lauda (Vienna) has announced that it will cease operations by the end of 2020 and will be replaced by a new unit, Lauda Europe (LW, Malta International), which has already commenced its certification in Malta.

The Austrian subsidiary of Ryanair Holdings said that the new unit would continue to operate A320-200s as a capacity provider under wet-lease terms for the needs of the entire group from its existing bases in Austria, Germany, and Spain, as well as new bases around Europe. Lauda Europe plans to commence operations in November 2020, subject to its AOC being secured by then.

The low-cost carrier holding blamed Austrian tax regulations for the decision, saying that they prevented Laudamotion GmbH (Lauda's legal name) from fulfilling the true potential of the Lauda brand. In particular, it pointed out that by demanding that all employees be taxed under Austrian law, regardless of the location of their bases, the regulations hindered the expansion of Lauda as a wet-lease provider in other countries.

"Lauda Europe will allow German and Spanish based cabin crews to pay their income taxes in Germany and in Spain. Lauda Europe will also facilitate new bases being opened across Europe, with pilots and cabin crew employed on local contracts... Lauda Europe, with an Airbus AOC, will offer greater flexibility to the Ryanair Group, as it will open up bases across Europe without the penal restrictions imposed by Austria's income tax system," the group said.

Ryanair Holdings criticised Austria for first demanding Austrian income taxation of crews based abroad but then refusing to provide COVID-related job protection assistance covering these workers. Staff who recently accepted new collective labour agreement at Lauda will be allowed to transfer to Lauda Europe.

In terms of its business model, the change will have limited impact on Lauda and Lauda Europe. The Austrian unit planned to drop all in-house operations and fly exclusively under Ryanair's FR code going forward even if it had stayed in Austria.

Lauda Europe will be Ryanair Holdings' second Maltese AOC besides Malta Air (MAY, Malta International), which operates B737-800s on behalf of Ryanair.