Published: Mon, January 01, 2018
Finance | By Loren Pratt

IAG Agrees To Buy Austrian Holiday Airline Niki

IAG Agrees To Buy Austrian Holiday Airline Niki

British Airways owner IAG is buying Niki from collapsed Air Berlin in a deal worth €36.5m (£32.5m), swooping on the Austrian airline weeks after Lufthansa was forced to back away.

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.

It was the EC's reluctance to allow Lufthansa to take over NIKI on competition grounds that led to the German flag-carrier withdrawing from the deal, triggering NIKI's bankruptcy. Lufthansa dropped its interest in acquiring Niki along with large parts of parent company Air Berlin after European Union regulators expressed their concerns. The European Commission (EC) had expressed competition concerns about Lufthansa's bid.

As a result, Niki grounded its planes, stranding thousands of passengers, after filing for insolvency protection.

The EU later approved Lufthansa's scaled-back plans, allowing another low-priced carrier, Easyjet, to buy up the remaining Air Berlin assets. "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-priced air travel". The assets include about 15 planes, as well as slots in airports such as Vienna, Munich and Palma.

While 2017 has been a bruising year for some European airlines - after the collapse of Air Berlin and Monarch Airlines in the United Kingdom, and as Alitalia in Italy went into administration - IAG has bucked the trend.

A source with knowledge of the matter told Reuters yesterday that IAG was in exclusive talks to buy Niki, after the insolvent airline's administrator said that one bidder out of four had remained in the race for the holiday carrier.

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