Austrian holiday airline Niki would be purchased by British Airways’ parent company IAG. The firm would pay €20 million ($24 million) for the insolvent Austrian flier.
Additional liquidity of up to €16.5 million would be provided for the Austrian company by IAG, the company Also said.
Following the exit and withdrawal of financial support from the largest shareholder of Niki – Etihad Airways, the company was put up for insolvency by its former owner Air Berlin in August.
It was also in December that plans to purchase Niki was dropped by German carrier Lufthansa.
That was after “deep competition concerns” were expressed by the European Commission about Lufthansa owning about 81 percent in Air Berlin and Niki jets.
Air travelers in the markets of Germany, Austria and Switzerland would end up having limited choice due to the deal, the Commission said.
This resulted in Niki grounding all of its places which created chaos as thousands of passengers were left stranded. It then filed for insolvency protection.
Niki was sold to Air Berlin in 2011 after it was founded by Niki Lauda, the Austrian ex-F1 racing champion.
A bid to purchase back the airline was put by Mr Lauda after he had heard of the grounding of the airlines, he said.
About 740 erstwhile staff of the airline would be kept by the new owners while the airline would be operated as a part of the budget carrier Vueling of IAG, the company said. Slots in airports like Vienna, Munich and Palma as well as about 15 planes are among the assets that are owned by Niki.
The European authorities however has to still give approval for the deal.
It should be mentioned here that the European Commission has already passed the purchase of some of Air Berlin’s assets by EasyJet. The Commission said that no breach of the EU competition policy was being done by the deal.
Niki, which had grounded all of its planes on December 14 this year, also serves resorts in southern Europe and north Africa. The grounding resulted in about 5000 passengers being stranded abroad and who needed to be brought back to their destinations, according to Austria’s Der Standard daily. Most of the passengers were stranded in Majorca.
In the two weeks after the grounding, there were about 40,000 passengers who were booked to fly the airline according to Der Standard. At least 145 flights every week was planned to be operated by the airline during the holiday season primarily from the countries of Austria, Switzerland and Germany.
(Adapted from BBC.com)