U.S. Markets closed

Niki Lauda’s Lasting Aviation Legacy

Patrick Whyte
Niki Lauda’s Lasting Aviation Legacy

“Running an airline is the most difficult job in the world. Racing was more dangerous for my life,” motorsport driver and aviation entrepreneur Niki Lauda, said in a 2009 interview.

Lauda, who died on Monday at 70, was a rare example of someone who managed to succeed in two very different industries.

Not only was he a three-time Formula One world champion — two of these victories occurring after a horrific crash in 1976 — he also spent almost four decades in the aviation industry, starting three different airlines, all of which carried his name.

“He was always eager to found a new airline and to show the big ones that a small company [can do] it much better,” said Karsten Benz, who held senior positions at both Lufthansa and Austrian Airlines.

Lauda was happiest solving problems, one of which was how to keep prices low while offering something different than the other low-cost carriers in the market. “He was always very much focused on quality…especially in catering,” Benz said.

Lauda walked this tightrope between cost and quality pretty successfully. When Austrian Airlines bought his first airline Lauda Air, it kept the brand going for another 13 years before retiring it, presumably because people loved flying and working under it. (Lauda later admitted he was an “idiot” for signing over the name.)

“He was incredibly direct, extremely sharp, straight to the point. And that combined with a good sense of humour made discussions very fun,” said Christoph Debus, CEO of Thomas Cook Airlines.

Lauda was also one of a small number of airline owners and CEOs who was also a qualified pilot. He racked up thousands of hours flying his company’s aircraft.

“It made quite a difference that you could really spot him during the flights, being in the cockpit or welcoming the guests onboard the plane,” Debus said.

Not everyone loved him, however; unions disliked the pay levels and contract structure, and it seemed like the feeling was mutual.

“I’d rather keep them out, purely and simply,” Lauda said.

40-Year Career

Lauda founded his first airline, Lauda Air, in 1979, starting operations in 1985. The carrier eventually ended up flying long-haul, mainly from Austria to Asia and Australia. In 1991, Lauda Air Flight 004, crashed shortly after taking off from Bangkok.

For Lauda the crash and death of 223 people was the worst moment of his life. Worse than his own crash at the 1976 German Grand Prix that came close to killing him and left him with extensive burns over head.

Investigators eventually blamed an engine malfunction on the Boeing 767 jet. “What really annoyed me was Boeing’s reaction once the cause was clear. Boeing did not want to say anything,” Lauda said in a 2006 interview.

After selling out to Austrian Airlines, Lauda caught the aviation bug again in 2003, starting up Niki. He gave himself some help by partnering with Air Berlin, who took a minority stake before becoming the sole owner in 2011.

Air Berlin’s demise six years later gave Lauda a chance to get his hands on the airline again, using his newly formed Laudamotion carrier to take control.

Again Lauda partnered with established airlines, firstly with Thomas Cook-owned Condor and then much more seriously with Ryanair. The Irish carrier bought a 24.9 percent stake gradually upgrading this to 100 percent by the end of 2018.

“Niki Lauda will remain in our heart and our memory as a visionary leader, a legend of Formula One and an aviation pioneer,” said Ryanair CEO Michael O’Leary.

Lasting Legacy

Lauda was an increasingly rare example of an entrepreneur who wanted to take on the established airline industry. Europe, like the United States, has seen a steady stream of airline mergers over the last few decades, with big groups making it much harder for smaller companies to succeed.

“The airline business has become a question of size. If you start a company your size is small, and the question is how to survive with 10, 15, 20 airplanes — the bigger the better — and this is something that makes it very difficult to found an airline,” Benz said.

Lauda’s tie-ups with bigger, more established players gave him a fighting chance to succeed where others did not. It’s a similar approach to Richard Branson and the Virgin Group. Branson always pitched his Virgin Atlantic brand as the young upstart to stuffy British Airways, but it is arguably only still around because of its deals with Singapore Airlines, Delta Air Lines, and Air France-KLM.

“To be a brilliant Formula One driver requires taking calculated risk. Niki Lauda took that spirit into an airline and market previously dominated by a national carrier; challenged convention, created best-in-class products, and left a lasting legacy of aviation success,” said John Grant a partner at consultancy Midas Aviation.

Risk takers like Lauda don’t always succeed, but the industry would be a lot more boring without them.

Subscribe to Skift newsletters covering the business of travel, restaurants, and wellness.