Austrian Airlines has now thrown a warning out to the European Commission that if they rule against the proposed takeover by Lufthansa, they would need at least €1 Billion in new funds to ensure its survival.
Peter Mnichaelis, the chairman of Austrian Airlines, told the airline’s shareholders in a meeting earlier this week that if the transaction fell through, the airline would need more than twice the €500 million pledged by the government in Vienna.
The European Commission, the competition watchdog, has demanded that Lufthansa give up certain flights in and out of Austria to get the go ahead for the deal. This is a deal that Lufthansa claims will make the move uneconomical.
The regulator recently just launched an investigation into the take over of Austrian Airlines and is saying that the deal could reduce choice and hike up fares for passengers on some of the routes. The regulator goes on to say that they have serious doubts that the takeover could proceed without the airline making some changes to eliminate antitrust concerns. The European Commission says that the company would become too powerful on flights from Vienna to European cities.
Right now Lufthansa is Germany’s biggest airline, and Austrian Airlines dominates all routes out of Austria. However, Lufthansa has now been without reason and has already offered to make some of the changes that the European Commission has demanded. However, the European Commission says that these changes were not sufficient enough to approve the deal at this stage, and it wanted more time to look at the problems and possible solutions.
For more information visit: www.aua.com