OAG Travel News

The Austrian government is to put up for sale its 43% holding in Austrian Airlines, the national carrier.  A member of the Star Alliance, it owns regional carrier Austrian Arrows and Lauda Air, and has a 22.5% share in Ukraine International Airlines.  The majority of shares is held as floating stock (48%) with the balance owned by Austrian institutional investors.

Much earlier this year the airline issued a gloomy prognosis which clearly has not been helped by the rise in oil prices since that time.  On Friday (18 August) it axed its London City – Vienna route.  However in a positive move it plans to introduce services to both Jeddah and Riyadh at the start of the winter season.

Restrictions on the purchase include a stipulation that 25% of the carrier must remain in the hands of Austrian core shareholders, the brand must stay intact, and the HQ must remain in Vienna.  The airline lost E48.7 million in the first half and this figure is expected to grow to E70-90 million in full year 2008. 

In spite of the awkward restrictions, the poor trading figures and the generally depressing outlook in the air travel industry, some serious bids are forecast.  Vienna Airports strategic position is considered a plus point as is Austria’s EU membership.  Austrian for many years had a fine working relationship with the then Swissair, its successor part of the Lufthansa Group.  Turkish Airlines, now a member of Star Alliance, is thought to be a possible bidder, as is Lufthansa itself.     

According to a statement by Austria’s finance minister, Wilhelm Molterer, the national holding company will be in charge of the privatisation process and bids for Austrian Airlines will be accepted for a period of two months.  The holding agency will be required to make a decision as to the accepted bidder no later than the end of the year.  Austrian Airlines will be unlikely to see any major changes implemented until early 2009.

Source: http://www.abtn.co.uk By Malcolm Ginsberg