People's boss Krutzler: "If we stop flying, there will be no more flights to Vienna"

The private St.Gallen-Altenrhein airfield is unique in Austrian-Swiss aviation. Not only is it the only airport with this legal status that has regular scheduled and charter flights, but the small group of companies also has its own, certified airline. Aviation Direct spoke to People's Managing Director Thomas Krutzler about the status quo, future plans and why people in St.Gallen-Altenrhein are happy to be small.

While most airports and airlines have ambitious expansion plans, the situation in St.Gallen-Altenrhein is different. They are proud of being small and efficient and see this as a great strength. Although the airport is in Switzerland, the scheduled flights to Vienna operated by People's are mainly used by people from Vorarlberg. There is a reason for this, because apart from Burgenland, Vorarlberg is the only Austrian federal state that does not have its own commercial airport. In a way, this has grown historically, because aviation in Vorarlberg is strongly influenced by the pioneering achievements of Rolf Seewald.

Rolf Seewald brought scheduled flights to St. Gallen-Altenrhein

He initially started his Rheintal flight in Hohenems, but soon reached the limits of what was possible with regard to the aircraft available. The solution: Vienna flights were established from the private airfield in St. Gallen-Altenrhein. At peak times there were up to six daily counter-rotations, which were most recently operated with de Havilland Dash 8-300 and Embraer 145. After the takeover by Austrian Airlines and the subsequent merger with Tyrolean Airways, the former race track was gradually dismantled.

This also put Markus Kopf, the current owner of St. Gallen-Altenrhein airport, under real pressure. He knew very well that the airport could not be operated economically without the scheduled flights to Vienna. The solution to the problem: an in-house airline with an Austrian AOC was created and for a short time there were even two providers on the regional route, People's and AUA. Although the Austrian Airlines management at the time repeatedly assured that St. Gallen-Altenrhein would be included in the route network at least until the end of the contract, the small People's won out in the competition. AUA withdrew. It is not particularly common in the industry for a carrier belonging to a large group such as Lufthansa to literally "capitulate" to a small newcomer and withdraw.

Airport and airline boss Krutzler: “We are proud to be small”

But where is the journey going for the small airline, whose only Embraer 170 is named "Laura" and whose airport is extremely important for Vorarlberg, St. Gallen-Altenrhein? Managing Director Thomas Krutzler explained in an interview with Aviation.Direct that "major expansion steps" are not to be expected at all. "Laura" will not have a "sibling" either, but will remain a so-called single-aircraft operation for the foreseeable future. Krutzler's management team also has no immediate need to take action regarding a possible successor model, as a lot of money was recently invested in the existing aircraft, which is owned by the group of companies. Previous plans to add up to two new Embraer E190-E2s to the fleet have long since been abandoned.

Thomas Krutzler explained that for the time being there will be up to two daily rotations on the St. Gallen-Altenrhein-Vienna route. He does not want to rule out a possible comeback of midday flights, but there are no short-term plans for this. According to the manager, there are various reasons for this. They want to guarantee passengers predictable and stable connections, but if they want to operate both charter and midday flights they would need two aircraft. But they no longer have that, which is why People's has opted for stability and quality over quantity.

Climate ticket has a negative impact on demand

When asked about passenger numbers, Thomas Krutzler explained that the airline had been hit hard by the corona pandemic and the fact that Austria and Switzerland had very different entry and quarantine regulations. Demand has now recovered. The trend is "clearly positive" in terms of both revenue and passenger numbers, said the airline and airport boss.

But People's is now plagued by a completely different problem. Austrian companies must document and report the carbon dioxide emissions of their entire business activities - including business trips. This can sometimes be expensive, because the legislation imitated by Leonore Gewessler (Greens) not only causes enormous bureaucratic effort for companies, but also additional costs. This has led to numerous Vorarlberg companies issuing climate tickets to their employees and shifting business trips that are not time-critical to rail. "We are also seeing the phenomenon of using the People's flight to get to Vienna and then returning by train - or vice versa," says Krutzler. "Yes, we are feeling the strong competition from the climate ticket, not only among private travelers, but also among corporate customers, who are now thinking very carefully about whether to use the plane or not."

If the Vienna flights are no longer profitable, they will be discontinued

The St. Gallen-Altenrhein-Vienna flights are now cost-covering again. Whether this will remain the case in the long term depends on the market's acceptance. "It must be clear to everyone that if the scheduled flights are no longer profitable, we are not prepared to bear losses in the long term. As a consequence, the scheduled connection would have to be discontinued. The Vorarlberg, Liechtenstein and eastern Swiss economy and industry must be aware that if our offer is not sufficiently accepted in the long term, there will no longer be any flight connection to Vienna," explains Krutzler. An alternative operator is virtually impossible - partly due to operational restrictions at St. Gallen-Altenrhein Airport. "80 to 85 percent of customers are business travelers."

Even if St. Gallen-Altenrhein currently has no ambitions to think about renewing the fleet, Thomas Krutzler already has a theoretical and, in his view, logical successor in mind: "We can fly our Embraer 170 safely and reliably for around 8-10 years. Until then, we will look around the market and the Embraer 175-E1-Plus could be a potential successor. Until then, there may be interesting options on the used market. In the short term, however, over the next few years, we will stick with our reliable 'Laura'."

Turboprop aircraft “currently not an option”

When asked whether, for example, the ATR72-600 could be operated more cost-effectively on the Vienna route, Krutzler agreed and noted: "If you only look at Altenrhein-Vienna-Altenrhein, the ATR72-600 is more cost-effective to operate. However, we would then no longer be able to operate most of the charter flights that we operate for local tour operators because the range of this model is not sufficient. Therefore, the ATR72-600 is not an option for us. We are very satisfied with the Embraer 170, which we currently believe is the ideal aircraft for our needs."

Formally speaking, St. Gallen-Altenrhein is not an airport at all, but a private airfield that does not have an airport concession under Swiss law. This is not needed either, because there were already regular scheduled flights before the law was changed, so St. Gallen-Altenrhein benefits from protection of existing rights. But this also means that the number of commercial flight movements is limited and if this limit is exceeded, an application for a concession as an airport must be submitted. According to Krutzler, they are still a long way from this mark: "We currently have around 30 flight movements per year, and we are allowed to have up to 000 movements," says the manager. "Particularly with regard to noise protection, we adhere to the requirements that arise, among other things, from the current state treaty between Switzerland and Austria."

Vorarlberg residents do not like to change trains in Vienna

In fact, St. Gallen-Altenrhein is mainly used by people from Vorarlberg. It is all the more grotesque that there is strong opposition from this Austrian state in particular. Krutzler says: "Like every airport worldwide, we do not only have patrons. That is nothing special. We are in constant communication, particularly with the institutions of the Vorarlberg state government. An adapted set of rules is already in place and may be able to be negotiated bilaterally in the foreseeable future. In any case, we take criticism very seriously."

Incidentally, People's does not have a cooperation with Austrian Airlines. Through tickets - with a change in Vienna - cannot be booked. Krutzler said that in discussions with AUA officials, he had agreed that it would not really make sense for either side. At the time when AUA served this route, only 15 percent of passengers were transferring. They would now fly from Zurich or Munich, for example. The effort for interline and/or codeshare cooperations would represent a disproportionately high effort for both carriers, given the low demand for transfer flights from/to St. Gallen-Altenrhein.

Lounges get a fresh-up and the slopes get a new surface

There will soon be two new features at the small airport, whose terminal is a collection of containers that are attractively designed on the inside: "We will be significantly upgrading both the business and pilot lounges. This affects the furnishings, the range of products and the design. We will soon be offering business aviation passengers and pilots a lot more, because that is what the market expects," says Krutzler. The catering included during flights was not abolished because of the costs, but: "I'll be completely honest, we don't save that much by abolishing the meals. But I was very bothered by the enormous food waste that we had every evening in St.Gallen-Altenrhein. Many passengers didn't want to eat anything or helped themselves to food in the lounge before the flight. So we've abolished the included meals. Drinks are still included."

The small airport is facing a major project in the summer of 2025. The surface of the approximately 1500 meter long runway must be renovated. This means that the asphalt runway will probably not be able to be used for three weeks. "We are currently still in coordination with the Federal Office of Civil Aviation and our partners. It is still unclear whether or not the helicopter operations and our grass runway can be used by general aviation during the temporary closure. On the route, we have not yet decided whether we will suspend the Vienna flights during the renovation work or temporarily relocate them to Friedrichshafen or Memmingen. We are also in close contact with our tour operator partners regarding charter flights," says Krutzler. "But we will announce it as early as possible so that our customers and partners can plan reliably."