Andrew Doyle/MUNICH
Niki Lauda has resigned as chairman of Lauda Air after a protracted and increasingly bitter battle with the management of major shareholder Austrian Airlines. The former world motor racing champion founded the airline which bears his name in 1985 and has been at the helm ever since.
Though profitable until last year, Lauda Air has recently fallen deeply into the red as a result of the weak euro and the failure of the Austrian Airlines Group to hedge against sharp rises in fuel prices. Lauda hatched a plan to keep the airline solvent by selling and leasing back five aircraft, but ran into vehement opposition from 36%-shareholder Austrian.
After publicly accusing Lauda of financial mismanagement and flouting company law, the flag-carrier said it would try to snatch control of the airline by buying Lufthansa's 20% holding. Austrian also holds an option to acquire Niki Lauda's 29% stake, but cannot exercise this without his consent before next July.
Lauda resigned from his airline's executive board after auditors KPMG criticised its internal controls over foreign currency transactions, although they did not blame him directly. Financial policy is the remit of chief executive of finance and administration, Peter Thöle, with Lauda himself responsible for flight operations, public relations and the negotiation of strategic partnerships.
Lauda says he resigned after he was criticised "as an individual". He will continue to fly for Lauda as a pilot, but the airline says it is "too early to say what he might do in the future". It is unclear whether Lauda will now agree to sell his outstanding shares to Austrian before July.
Problems at Lauda contributed to the Austrian Group's ATS261 million ($16 million) pre-tax loss for the first nine months, although Austrian says cost cutting achieved a third quarter profit and should deliver a "positive annual result". Austrian says it is committed to retaining the Lauda brand, with a "far reaching" restructuring of the wider group to be presented to Austrian's supervisory board next month.
Source: Flight International
