Irish budget carrier Ryanair has announced it's buying a stake in new Austrian leisure airline Laudamotion. The move will help Ryanair secure a bigger foothold in Germany and Austria where it competes with Lufthansa.
Ryanair said Tuesday it had agreed to acquire an initial 24.9-percent stake in Laudamotion, formed out of the insolvent Niki carrier that was part of defunct Air Berlin.
The Irish no-frills carrier added that it eventually planned to buy a 75-percent stake in former Formula One racing star Niki Lauda's new airline, noting that such a move was subject to approval by EU regulators.
Ryanair said it would invest €50 million ($61.7 million) in the purchase, but would also provide an additional €50 million in funding for startup and operating costs in the first year.
Breathing down Lufthansa's neck
"We look forward to working in partnership with Niki Lauda to develop his vision for a successful Austrian low-fares airline to service the schedule and charter markets," Ryanair CEO Michael O'Leary said in a statement.
"With access to Ryanair fleet and financial resources, Laudamotion will now grow more rapidly as it seeks to compete in a market which is dominated by Lufthansa's high air fares with its Swiss and Austrian subsidiaries."
By buying into Laudamotion, the Irish company will gain a bigger foothold in Germany and Austria.
"A new player in the aviation market is born," commented Niki Lauda. "I'm looking forward to offering our passengers an extensive route portfolio at competitive fares," he added.
hg/sri (Reuters, AFP)