I've updated the scenario based on some feedback, and gone into some detail about some events that may take place in the first few months of the war. I'm not a huge military expert, so I'm not sure who the commanders or personnel would be, so I've tried to focus on the geography of the war. I think that this war would be much less mobile than WW2 was in our timeline with more stalemates and battles of attrition, especially in the alps.
1st September 1939 – Germany attacks Poland. WW2 begins. Austria Hungary remains neutral for now, with some parts of the empire reluctant to go to war with Germany and Prague especially being strategically vulnerable. However, the armed forces are mobilised, and the general population see war with Germany as inevitable.
12th September 1939 – Poland is holding on, constraining German forces to west of the Vistula. This is due to a portion of the German army having to garrison the border with Austria Hungary in case of attack and Germany having had no access to Czech or Austrian industry. Germany is also unable to invade through Slovakia for obvious reasons. Although Molotov Ribbentrop stands, the USSR for now focuses on the Baltics and making demands of Finland.
Talks begin between Britain, France and Austria Hungary, who will enter the war, but only on the condition that France launches an offensive into Germany and Poland continues to actively fight. In the meantime, Austria is keeping Poland supplied, whilst rapidly building up and modernising their own military. The Skoda works are being swiftly relocated to Transylvania.
10th October 1939 – Having secured support of each autonomous region of the empire, Austria Hungary declares war on Germany and begin an offensive to retake the sudetenlands.
Kaiser Otto 1st addresses the world in a passionate speech, which he repeats in German, Hungarian, Croatian, English and French, recounting personal stories from refugees fleeing persecution in Germany and declaring that German demands will not end with Poland or Austria. He states that neutrality will not be an option for any European nation, and that it is the duty of every European rise up against the Third Reich.
11th October 1939 – The Wehrmacht organises forces attacking Poland into Army Group North, and forces along the Austro-Hungarian border as Army Group South
12th October 1939 – Heavy German bombing raids start on Prague and Vienna. Austria Hungary retaliates with bombings of Berlin, Dresden and Leipzig using license built Amiot bombers. Over the coming weeks, Austrian Hungarian bomber squadrons would often encounter British bomber squadrons dropping propaganda leaflets on the same cities the Austrians had just bombed.
13th October 1939 – The south sudetenlands between Austria and Bohemia is reclaimed, facing only token German opposition in this strategically undefendable area. Austria Hungary also make gains in Silesia, thwarting an ongoing offensive into southern Poland. The land corridor between Danzig and the rest of Poland is lost in a pincer movement from north and south. Danzig is now surrounded.
21st October 1939 – The offensive into the sudetenlands runs out of steam, succeeding in retaking most of the province. A German offensive into the Tyrol is halted north of Innsbruck and constantly harassed by well-trained Kaiserschutzen fighting on home turf.
28th October 1939 – Danzig falls.
11th November 1939 – Army Group South begins an offensive into Austria northeast of Salzburg and the northern sudetenlands. Army Group North attacks from east Prussia simultaneously. By the 20th, the offensives are halted with only limited territorial gains. In contrast, German forces are forced to withdraw to more defendable land from the Tyrol following an attrition campaign from the mountains.
The Eastern Front remains static until the new year. The direction of the war is uncertain, with plans for offensives into Munich and Leipzig being explored. Conversely, an offensive in Bohemia could endanger much of the army and necessitate a withdrawal to behind the Danube to defend Vienna. Austria Hungary and Poland complain to Britain and France that a large-scale offensive has not begun in the west, and that now was the time for an assault on the Rhinelands France insists that the Saarland offensive has been very successful. The eerie quietness on both fronts over the winter allows for both Poland and Austria Hungary to resupply with more modern equipment and aircraft.
Although the priority of the British Expeditionary Force is to be ready to protect Belgium in case of invasion, several divisions and squadrons of RAF aircraft are redirected to Bohemia and Austria. This is in addition to lend leased and license-built Hawker Hurricanes entering Austrian Hungarian service, replacing obsolete Avia biplanes.
30th November 1939 – The Winter War between Finland and the USSR begins.
11th January 1940 – A Polish offensive into East Prussia is repelled and a small German Offensive into the Sudetenlands has limited success.
18th January 1940 – A full scale invasion of Austria Hungary begins, and Italy enters the war on the German side, with Germany invoking a pact of friendship signed between the two countries a year before. Italy believes the defences along the French and Austro-Hungarian borders to be weak, and conducts an invasion of both countries. An attack on the suburbs of Warsaw also begins on the Polish front, which over the next month is heavily contested becomes a frontline city
19th January 1940 – The Italians have some early successes, penetrating as far north as Patsch and Finkenberg in Austria and as far west as Moutiers in France. Italy aims to open a supply corridor through the Tyrol with Germany to facilitate the invasion.
22nd January 1940 – However, by the 22nd January, stiff opposition from both France and Austria Hungary reverses the offensive, and Austria Hungary even begins a counterattack, moving into the Austrian South Tyrol and the Istrian peninsula. German forces are only successful in the lower lands in North Austria, and a siege on Linz starts.
7th February 1940 – Austrian Hungarian forces start a renewed siege on Trieste which will last several days, with a narrow land corridor maintained by Italian forces. The invasion into north Austria is halted as the Kaiserschutzen are redeployed to the Italian front.
8th February 1940 – Bogged down in Austria, Army Group South presses the offensive into Bohemia with the aim of encircling Prague. Over the next few days, Austrian Hungarian forces withdraw from Carlsbad and the north Sudetenland in order to defend Prague and counter the pincer movement from Liberec in the north and Plzen to the west.
11th February 1940 – Polish and Austrian Hungary forces win the battle of Gleiwitz, capturing the city and providing a much-needed morale boost for the men of both countries as this is the first German city to fall so far in the war. German forces however take Wels in Austria
12th February 1940 – The siege of Trieste ends and Austria Hungary forces enter Trieste and Bolzano in the South Tyrol.
16th February 1940 – Following a month-long battle, Warsaw falls, and the remaining defenders of the city are forced to withdraw to east of the river Vistula. The Polish government has evacuated to Lvov. Austria Hungary pledges that the first of its freshly trained recruits will be sent to defend Poland, and that retaking Warsaw will be a top war priority. Italian Forces begin a counterattack into the South Tyrol.
17th February 1940 – After only holding the city for 5 days, the Italian Counterattack succeeds in retaking the western suburbs of Trieste, with clashes devastating the city.
The German offensive in Bohemia reaches the outskirts of Prague.
28th March – After a quiet month on the eastern front where all attempted attacks have resulted in stalemate, Austria Hungary begins an offensive to retake Trieste.
30th March – Taking advantage of Austria Hungary’s army being tied up in Trieste, a refreshed Italian force with their own mountain Alpini forces advance into the South Tyrol, undoing Austrian gains.
29th April – The second battle of Trieste is an Austrian victory, but in the Tyrol, Italy breaks the Austrian lines at Lagenfeld, before being halted short of the Inn Valley.
4th May – Italian forces traverse challenging terrain to capture key Tyrolean towns along the Zillertal and Wipptal valleys, but are unable to break through Austrian bottlenecks to reach the Inn Valley
27th May – A thrust from north Bohemia threatens to encircle Prague from the east, starting the first real Blitzkrieg attack of the war since September 1st.
5th June – A counter offensive from Prague from the west and Pardubice from the east succeeds in surrounding a portion of the German attack force but leaves Prague vulnerable from the west. German troops enter Prague and fight their way into the centre of the city.
7th June – Prague falls completely under German control, and what is left of the Austria Hungary forces defending the city and surroundings begins to withdraw to the south Sudetenland’s through a tenuous corridor, exhausted and running out of supplies. The encircled German forces east of Prague are freed by a Panzer thrust, breaking the line east of Prague.
12th June – Considerable strain is put on the forces defending Bohemia to widen the salient south of Prague to enable forces to withdraw to a line stretching from the south sudetenlands to Brno.