Ryanair to buy majority stake in Laudamotion airline
Low cost carrier (LCC) Ryanair announced on March 20, 2018 that it has entered into an agreement with Laudamotion to acquire up to 75% of its stake. Under the agreement, the Irish LCC will initially acquire 24.9% stake in Laudamotion and rise to 75% as soon as possible subject to EU Competition approval, according to official Ryanair statement.
Niki, now rebranded as Laudamotion, since it was bought back by its founder Niki Lauda, was a subsidiary of now insolvent Air Berlin (AB1) . Niki was acquired by the former racer after a deal for the airline fell through with conglomerate International Airlines Group (IAG) (IAG) when the insolvency proceedings for the airline were re-opened in Austria in mid-January.
According to the agreement with Ryanair, Lauda will chair the Board of Laudamotion and Ryanair will provide financial and management support to Laudamotion as well as 6 wet-lease aircraft for S2018 to enable Laudamotion to complete an extensive 21 aircraft flying program.
The cost of the airline deal is estimated to be under €50 million; however the Irish carrier plans to provide additional €50 million for the first year and operating costs. This is a significant acquisition for Ryanair which has not bought an airline since 2003.
The deal may be also significant to Airbus, since Ryanair, which has exclusively operated Boeing aircraft for the past 15 years stated it will support a fleet of Airbus. “The Laudamotion will support a fleet of Airbus aircraft which is something we have hoped to develop within the Ryanair Group for some years,” said Ryanair CEO Michael O’Leary.
Additionally, O’Leary noted the increased competition for Lufthansa (LHAB) (LHA) , which dominates Germany’s market “With access to the Ryanair fleet and financial resources, Laudamotion will now grow more rapidly, as it seeks to compete in a market which is dominated by Lufthansa’s (LHAB) (LHA) high airfares with its Swiss and Austrian subsidiaries. This Laudamotion partnership is good news for Austrian and German consumers/visitors who can now look forward to real competition, more choice and lower fares”.
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