Austrian Airlines attracts Turkish national carrier

Turkish Airlines has formally expressed interest in purchasing Austria’s shares in Austrian Airlines, the country’s soon to be privatized flag carrier, according to a report published by the AFP news agency. Despite the fact that Austrian Airlines finds itself in a difficult financial situation, the Central European legacy carrier has managed to attract four serious bidders, including Lufthansa, a Russian company called S7, Air France-KLM and now Turkish Airlines. Two factors may, however, make it difficult for Turkish Airlines to acquire the state’s 43 percent stake in the carrier. First, European Union regulations place limits on foreign ownership of carriers based within EU member states. This simply means that the majority of these carriers must be owned by firms and investors within the EU. The second obstacle that Turkish Airlines will find itself up against is the fact that Austrian authorities are widely believed to favour a Lufthansa bid. As such, even Air France-KLM-an EU firm-will have difficulty purchasing the state’s stake in the airline.

Despite these challenges and Austrian Airlines’ admittedly precarious financial state, Turkish Airlines indicated that it takes this bid seriously and sent a formal letter advising the Istanbul Stock Exchange of the firm’s current plans. Austrian authorities are likely to make a decision on the carrier’s privatization within the next two months and the Central European country’s government hopes that the process will be completed by December.

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