Austrian Airlines goes ahead with sale

The government of Austria has now formally announced that it will be selling a portion of its 43 percent stake in the country’s national carrier, Austrian Airlines. Additionally, ministers have also determined that foreign investors and carriers will be invited to submit bids for the shares, thus opening the way for a possible purchase by Germany’s Lufthansa. According to a statement by Austria’s finance minister, Wilhelm Molterer, the national holding company will be in charge of the privatization process and bids for Austrian Airlines will be accepted for a period of two months. The holding agency, however, will be required to make a decision as to which bidder it will ultimately accept, no later than the end of the year. As such, Austrian Airlines may see major changes implemented in early 2009.

Analysts and the Austrian government both anticipate that bids will start coming in later this month and into September. By October, however, officials will aim to create a shortlist of the most serious and preferred buyers.  Government officials, however, have long been concerned about ensuring that at least part of the airline remains in Austrian hands and is not sold off entirely to foreign interests. As such, the current agreement stipulates that 25 percent of the newly privatized firm must be comprised of Austrian investors. Austrian Airlines’ new owners will also be required by law to ensure that the carrier maintains its national identity, its brand, as well as its base at the Vienna International Airport. Most analysts believe that Lufthansa has the best odds among other potential bidders, including Air France-KLM and Turkish Airlines.

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