Austrian Airlines urges swift action on privatisation

Hotel News - 06/11/2008

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Germany's carrier Lufthansa has expressed its interest in acquiring the Austrian government’s share in the national carrier.

The head of Austrian Airlines, Alfred Oetsch, said in an interview with Austrian state radio that worsening financial conditions in Europe’s airline industry could have an impact on interest in the carrier, and that the process should proceed rapidly.

"The development in the sector is so dramatic that waiting would be dangerous," the airline executive noted. "Possibly the bidder could face problems too, because it isn't ringfenced against the sector's development either."

The holding company for the Austrian government, OeIAG, is selling its 42-percent stake in the national carrier, and currently considering bids from S7 of Russia, as well as Lufthansa.

Lufthansa’s offer has been made contingent on the government of Austria assuming 500 million of the 900 million euro of Austrian Airline’s debt. The bidding timeline has been extended so that details of the debt arrangements could be worked out.

Lufthansa’s bid includes a buyout of free float shareholders, but only a nominal payment to OeIAG for its share. The offer expires early in December, an inside source has said.

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