Air France close to submitting bid for Austrian Airlines

According to a Forbes report, Air France-KLM is on the verge of submitting a bid to purchase Austrian Airlines, which is currently undergoing privatization. Austria’s government is seeking to sell its 43 percent stake in the carrier and Air France-KLM has long been seen as one of two preferred buyers. The other bidder is Lufthansa, Germany’s flag carrier, and most analysts still believe that this airline has the best chance of buying its Austrian rival.

Jean Cyril Spinetta, Air France-KLM’s chief executive officer, confirmed earlier today that the Franco-Dutch company has every intention of submitting an official bid in the very near future. Although Europe’s largest carrier provided few details, another executive noted that the airline was in the process of “preparing its dossier.”

Austrian’s government is looking to sell the national airline on the condition that Austrians continue to hold at least 25 percent of the shares in the newly privatized company. There are other European Union rules that require all carriers operating in member states to ensure that a majority of shares are held by people or organizations based in the EU.

Austrian Airlines is attractive to many other carriers, mainly due to its extensive network of destinations in eastern Europe and its increasing prominence in the Middle East. Despite these positive aspects, Austrian Airlines is struggling financially and the carrier may generate an annual loss of as much as €90 million by the end of the year,

Thank you to Forbes and the Associated Press for the initial report.

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