Provincial political leaders are set to turn their guns on Lufthansa following revelations that the aviation firm is to axe its Linz Munich service.Local newspaper Oberösterreichische Nachrichten reports today (Tues) that the German company will stop offering flights between Blue Danube Airport in Linz, Upper Austria, and the German city of Munich as of 31 October.According to the newspaper Boris Ogursky, a spokesman for the Cologne-based company, said that “The market (demand) decides which routes Lufthansa flies and which not”.He claimed Linz continued to remain of “great importance” for Lufthansa since the firm had no plans to scrap its Linz Dusseldorf route.The Linz Munich connection has been operated by Lufthansas subsidies Augsburg Airways and Air Dolomiti. Just 270 kilometres separate the third-biggest city of Austria and the provincial capital of Bavaria.Lufthansas announcement to stop operating between Linz and Munich comes shortly after a reduction of the number of flights between the Linz and Vienna. A previous connection between Linz and Frankfurt is also no longer offered.Linz is located in the heart of one of Austrias strongest industrial regions. The area suffered massively when the global crisis peaked, but recently recovered significantly as companies put most of its workers back into full time work after ordering them to do part time following a decline in orders.Austrian Railways (ÖBB) said only last week it planned to stop offering a direct Intercity connection between Linz and Graz, the provincial capital of Styria.ÖBB argued it has been making losses on the route for a long time, explaining that the service cost 4.9 million Euros a year while just 1.4 million Euros were generated from ticket sales.Upper Austrian Peoples Party (ÖVP) Governor Josef Pühringer hit out at the struggling firm, which is owned by the state, saying: “Such a massive thinning of public transport between the second- and third-biggest city must not happen.”ÖBB told political leaders it may keep the Intercity service if the Upper Austrian government paid previously demanded subsidies, but Social Democratic (SPÖ) traffic councillor Hermann Kepplinger ruled out any additional financial support for ÖBB.ÖBB has debts of around 12 billion Euros. New CEO Christian Kern said recently he planned to reduce the companys administration department staff number by 1,000 by 2013. ÖBB has around 42,000 employees. The average retirement age of the firms staff is 52. Kern warned now was “last chance” to restore ÖBBs finances.Meanwhile, Christoph Franz has been appointed new Lufthansa boss. The German businessman will succeed Upper Austrian Wolfgang Mayrhuber who has headed the aviation giant for seven years next year.Lufthansa has faced immense pressure by low budget rivals Air Berlin and FlyNiki. In the mean time Air Berlin has become Germanys second-biggest airline, while its Vienna-based cooperation partner is Austrias biggest aviation firm following Lufthansas takeover of Austrian Airlines (AUA) last year.FlyNiki, which is headed by ex-Formula One champion Niki Lauda, had 2.6 million passengers last year. Lauda hit out at the Austrian government for pouring half a billion Euros into struggling AUA shortly before Lufthansa acquired a major stake.AUA, which has around 6,300 employees, suffered losses of 67 million Euros in the first half of this year. The airline managed to increase its passenger numbers by 10.1 per cent year on year to 7.3 million in the first eight months of 2010.AUA co-chiefs Andreas Bierwirth and Peter Malanik have warned staff of further spending cuts and redundancies over the coming years in an attempt to get the company out of debt.