Austro-Italian ironclad arms race
Seizing upon the decline of the Regia Marina in the years immediately after the Battle of Lissa, Tegetthoff worked to continue the efforts of Archduke Ferdinand Max of expanding the ironclad fleet of the now Austro-Hungarian Navy. Tegetthoff found political allies in the Austro-Hungarian Minister of War Carl von Franck and retired Admiral Bernhard von Wüllerstorf-Urbair. Wüllerstorf's and Franck's primary arguments in favor of continuing with the ironclad program Austria had engaged in prior to the Seven Weeks War lay largely along economic grounds. The two believed that constructing new ironclad warships would rejuvenate Austria-Hungary's economy following the defeat at the hands of Prussia and Italy, and that such a fleet would help to open up new commercial opportunities in the Levant and the Middle East. These proposals would be shelved however while Austria continued to reel from the military defeats inflicted by Prussia, and several cabinet reshufflings by Emperor Franz Joseph I resulted in a government more interested in pursuing revenge against Prussia than constructing new ironclads, which would be of little use in a hypothetical second war with Prussia.
Drache-class ironclad
Two years after the ships entered service, Austria joined Prussia in the Second Schleswig War against Denmark. "Drache" and "Salamander" were kept in the Adriatic to defend against a possible Danish attack, which failed to materialize. In 1866, Austria's erstwhile ally Prussia signed an alliance with Italy directed against Austria, beginning the Seven Weeks' War. The Austrian fleet was commanded by Rear Admiral Wilhelm von Tegetthoff, who attacked the Italian fleet as it attempted to capture the island of Lissa in the central Adriatic. In the ensuring Battle of Lissa, both ships were heavily engaged, with "Drache" inflicting fatal damage to the coastal defense ship , setting her on fire and ultimately destroying her. "Drache" did not escape unscathed, however, as she was hit by Italian shells numerous times; she lost her main mast, was temporarily set on fire, and her commander was killed. "Salamander" engaged the leading ships of the Italian line, though neither side inflicted serious damage on the other. Nevertheless, the loss of "Palestro" and the ironclad led the demoralized Italian fleet to disengage and retreat to their base at Ancona.