Austrian Airlines will stop flying to Australia, Malaysia and Singapore because the routes are no longer profitable, the New Straits Times newspaper reported today.

Austrian Airlines' manager for Malaysia and Singapore Wilson Tay said tough competition had outweighed the relatively high load factors on its flights from Vienna to Kuala Lumpur and Sydney, which would be axed from next March.

"Primary reasons for termination of the services are spiralling fuel prices and vicious competition, which have resulted in a low-yield environment," he told the daily.

"The operation has become extremely cost-intensive, therefore unviable to sustain," he said.

A blow to Malaysia

Tay said that another casualty was the airline's flights between Vienna and Melbourne through Singapore which currently operate three times a week.

The New Straits Times said Austrian Airlines, then known as Lauda Air, began flying to Kuala Lumpur in 1997 after deciding to make the Malaysian capital its Asian hub between European and Australian operations.

The decision is a blow to Malaysia, which among European airlines is served only by Air France-KLM, Lufthansa and Transaero. The New Straits Times said that from next May Finnair will also start flying into Kuala Lumpur.