Lufthansa to the Rescue?
August 25, 2008
There was no official word on how big the stake the leading German airline may want to acquire but the Austrian government decided last month to sell up to 100 percent of the airline.
Lufthansa or any of the other five airline interested in investing would be denied full ownership as a minority blocking stake of 25 percent was expected to be held by either private Austrian investors or the state-owned holding company OEIAG.
Potential buyers had until midnight on Sunday to notify their interest in acquiring at least a 42.75 percent stake in AUA, thought to be the majority of the stake held by OEIAG.
Lufthansa, a partner of AUA within the Star Alliance, faces competition from five unconfirmed bidders, although Air France/KLM and Russia's second-biggest airline, Siberian-based S7, have been connected without official confirmation.
The Russians could be the main rival to the German airline's plans as its expected bid would include a pledge to retain Vienna as AUA's main hub. Lufthansa is thought to be planning a preferred relocation to its own hub of Munich.
OEIAG has until the end of the year to find a partner for AUA, which has nearly 900 million euros ($1.4 billion) of debt, sustained a first-half loss of 48.7 million euros in the six months to June and is projecting a full-year loss of up to 90 million euros.
According to industry reports, Lufthansa is currently actively pursuing acquisitions and partnerships as smaller airlines feel the bite of fuel prices and the global credit crunch.
Lufthansa reportedly ready for alliance with Alitalia
It was reported at the weekend that the German carrier was the airline in talks with Alitalia over a partnership deal aimed at saving the cash-strapped Italian national airline from bankruptcy.
The Italian La Stampa daily reported on Saturday that there was "no longer any doubt" that Lufthansa was the foreign partner currently in the pole position to sign an alliance, citing sources close to the negotiations.
Italian Prime Minister Silvio Berlusconi said earlier this month talks were being held with a "large foreign company" over an agreement that would bail out the airline.