Andrew Doyle/MUNICH
Austrian Airlines stepped in last month to meet a debt repayment for struggling Lauda Air, in return taking over two regional jets from its part owned ally. Austrian is drawing up plans to tackle spiralling losses at Lauda as it struggles to cope with an unfavourable US dollar exchange rate and high fuel prices.
Lauda, a member of the Austrian Airlines Group, together with regional airline Tyrolean Airways, will become majority owned by the Austrian flag-carrier next year. Chairman Niki Lauda has warned that the airline stands to lose up to ASch600 million ($37 million) in its current financial year to 31 October unless the Euro strengthens substantially against the dollar.
Austrian confirms that it had met an ASch300 million debt payment for Lauda, in return for a pair of the latter's Bombardier CRJs.
Austrian Airlines will take control of Lauda in July by increasing its stake from 35.9% to 58.9%, leaving founder and chief executive Niki Lauda with 7%. Lufthansa owns a further 20% of the airline.
Despite Lauda Air's dismal financial performance, Austrian will end the year in the black, with the flag-carrier and Tyrolean Airways expected to deliver profits.
Austrian sources say the restructuring of the group could see a new holding company created, one which would take charge of network and fleet planning and commercial activities for all three group carriers. Lauda Air's network includes many low-yield long-haul leisure routes and a European scheduled network.
Source: Flight International
