Lufthansa considered top candidate to take over Austrian Airlines

Management consultants advising the Austrian government and flag carrier Austrian Airlines are indicating that Germany’s Lufthansa would be the best choice for taking over the financially-troubled airline, according to a report in Die Presse on Friday.

The Boston Consulting Group was taken on by the management of Austrian Airlines to consider a number of cooperation scenarios. Other than Lufthansa, the consultant’s report mentions only Russian air carrier Aeroflot as a viable partner, Die Presse reported.

For 2008, Austrian Airlines expects to end the year with a loss of 70-90 million euros, largely due to the increase in fuel prices.

Lufthansa’s CEO, Alfred Mayrhuber, has indicated an interest on numerous occasions in acquiring a stake in the Austrian carrier. At the same time, he has been clear that he would wait until Austrian Airlines’ management indicated they were ready to discuss the matter.

A major benefit to Lufthansa would be the strong presence of Austrian Airlines in central and eastern Europe, and also the Middle East. Passengers could be transported to hubs in Germany for onward connections to intercontinental flights.

The Austrian Airlines supervisory board is scheduled to meet on Monday to discuss the Boston Consulting report.

It is anticipated that the Austrian government will authorize the sale of at least part of its 42.75 per cent stake in the carrier, in August.

There has been no comment form Austrian Airlines on the news reports, and is deferring comment to Monday evening, when a press release will be forthcoming. The Boston Consulting Group has also not made any direct comment.

www.aua.com