Doubt sets in for Austrian Airlines takeover

LUFTHANSA’S chances of successfully taking over Austrian Airlines is “fading fast”, according to a European Commission (EC) spokesman.

The Albanian, Bosnian, Canadian, Israeli, Turkish, Ukranian and US authorities have already given their approval, Serbia’s is expected soon, but the EC as a whole must still give its permission for the deal to go ahead.

The EC’s approval is subject to the Austrian government awarding Lufthansa ?500 million (US$697.4 million) as a restructuring aid package and on Lufthansa submitting suggestions to limit its own market domination of Austria, a situation the EC has already expressed concerns about. However, Lufthansa’s proposed changes were deemed as not far-ranging enough by the EC.

A second set of proposals was made on 10 July but Jonathan Todd, the Commission’s spokesman, said that these were “worse than the remedies they offered in the first phase” and were a case of “one step forward and two steps back”.

“In the absence of remedies to the [European] Commission’s concerns that the takeover would reduce passengers’ choice of services and access to competitive air fares, the chances of a commission decision before the end of July are now fading very fast,” said Todd.

For the full story see the next issue of Air Cargo News out on 24 July.