Lufthansa declares interest in Austrian Airlines share

Lufthansa, one of the major players in European aviation, has made its interest clear in acquiring a share in financially-strapped Austrian Airlines, a spokesperson for the carrier reported.

Potentially-interested parties were given until the end of last weekend to contact the investment banking firm, Merrill Lynch, for information regarding the airline and the transaction. Merrill Lynch is handling the share purchase.

A Lufthansa spokesperson declined to elaborate on the details of the size of the stake the carrier was interested in acquiring.

The Austrian government announced, early in August, that it would sell a stake in the national carrier of up to 100 per cent. It is anticipated, however, that a minority block of around 25 per cent will be kept back to be held by either private Austrian investors of by the government holding company, OEIAG.

The Austrian national airline has been struggling with the rise in operating costs caused by high fuel prices, and insiders say that its loss for this year will be nearly 90 million euros. The airline is also carrying a heavy debt load.

Lufthansa has been thought to be the best positioned to purchase a share in Austrian Airlines, and is member of the same airline association, Star Alliance.

Another name that has frequently come up in discussions is Air France-KLM, which is the leading force in the Sky Team alliance, a rival to Star Alliance.

www.lufthansa.com