Business | Aviation
Lufthansa completes takeover of Austrian Airlines
Lufthansa completes takeover of Austrian Airlines
- AP
- Published: 16:57 September 3, 2009
Vienna: The takeover of the ailing Austrian Airlines Group by Germany's Deutsche Lufthansa AG was completed on Thursday, ending months of negotiations and marking a new start for the Alpine republic's flagship carrier.
Officials formally sealed the deal - which gives Lufthansa about 42 percent of Austrian shares owned by the government - at Vienna's international airport.
"Today marks the conclusion of the privatization of Austrian Airlines," said Peter Michaelis, the head of Austria's privatization agency, at a news conference. "It was unquestionably hard work but we can now say it was worth it - firstly for AUA but ultimately for Austria."
Last week, the European Commission green-lighted the roughly $366,000 ($523,000) bid and also approved a $500 million ($715 million) government restructuring program, which Lufthansa has said in the past would be necessary to reduce Austrian's debt.
The Cologne-based Lufthansa, which is now Europe's largest airline by sales, had also made a $166 million ($237 million) offer for the free floating Austrian shares.
Wolfgang Mayrhuber, Lufthansa's chief executive, said he looked forward to working together with Austrian Airlines and openly addressed the struggling carrier's financial difficulties that will cost many employees their jobs.
"AUA doesn't have a product problem, it has a cost problem," Mayrhuber said.
Hard-hit Austrian announced in July it planned to cut about 1,000 jobs by mid-2010 as part of an effort to boost its competitiveness.
But referring to the takeover as a "long-term investment," Mayrhuber also appeared optimistic that Austrian could stop seeing losses as early as next year.
Austrian executives Andreas Bierwirth and Peter Malanik welcomed Lufthansa's new leadership.
"This is an incredibly important day for our company," said Malanik, adding he was glad "the phase of uncertainty has ended well."
In 2008, 10.7 million passengers flew with the Austrian Airlines Group to 120 different destinations. Austrian Airlines currently operates a fleet of 91 aircraft.
Thursday's closing symbolized the latest step in Lufthansa's consolidation of the airline industry. In June, it won European Union approval of its acquisition of a stake in Brussels Airlines. Last year, it bought 80 percent of BMI British Midland - giving it a much greater presence at London's
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