British Airways owner buys low-cost airline Niki | News | DW | 30.12.2017
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British Airways owner buys low-cost airline Niki

International Airlines Group has agreed a €36.5 million deal to acquire the Austrian budget airline. Started by Formula One's Niki Lauda, the carrier went bust this month after a deal with Lufthansa fell through.

British Airways owner International Airlines Group (IAG) confirmed late on Friday it would buy insolvent Austrian airline Niki, in a deal that will protect around 740 of the budget carrier's 1,000 employees.

The London-headquartered firm will pay €20 million ($24 million) for Niki's assets and provide liquidity of up to €16.5 million to the carrier, IAG said in a statement.

Founded by former Formula One champion Niki Lauda in 2003, Niki flew to several tourist destinations in Spain, Portugal and North Africa from its home base in Vienna.

Niki — a subsidiary of Air Berlin since 2011, which itself went bust in August — had been expected to be mopped up by Germany's Lufthansa as part of a deal to acquire the larger defunct cEasyjet.

Read more: Air Berlin’s last flight melts hearts from Munich to Berlin

German deal scuppered

But Lufthansa pulled out of the purchase earlier this month, amid concerns the European Union's competition regulator would reject its expansion plans.

That forced Niki, which continued flying after Air Berlin ceased operations in October, to file for bankruptcy and ground its planes on December 14.

The EU later approved Lufthansa's scaled-back plans, allowing another low-cost carrier, Easyjet, to buy up the remaining Air Berlin assets.

IAG plans to turn Niki's operations into an Austria-based subsidiary of its no-frills Spanish airline Vueling, which the firm said will operate independently.

"This deal will enable Vueling to increase its presence in Austria, Germany and Switzerland and provide the region's consumers with more choice of low-cost air travel," said IAG chief executive Willie Walsh.

Read more: Unfair competition: The battle between high-speed rail and low-cost airlines

Fifteen of Niki's 20-strong fleet will be incorporated into the new company, as well as the runway slots at airports including Vienna, Munich and Zurich.

IAG has said it expects operating profits to grow 20 percent in 2017 to €3 billion, bucking a trend that has seen the fortunes of several European airlines nosedive.

As well as Air Berlin's insolvency, British carrier Monarch went bust in October, while Italian flag carrier Alitalia was forced into administration five months earlier.

mm/tj (AFP, AP, dpa)

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