International Airlines Share News (IAG)

LONDON (Alliance News) - Irish budget airline firm Ryanair Holdings PLC said Tuesday it was preparing to acquire a 75% stake in LaudaMotion - which acquired the assets of former Austrian airline Niki - for less than EUR50 million.

LaudaMotion was created when former Formula One racing driver Niki Lauda in January acquired the assets of the insolvent holiday airline which had founded originally.

Ryanair will acquire an initial 24.9% stake in LaudaMotion. Subject to regulatory approval, Ryanair plans to increase this to 75% "as soon as possible".

If approved, Ryanair said the 75% stake would cost less than EUR50 million to buy. Ryanair will, however, also provide a further EUR50 million for first year start up and operating costs.

For the year ended March 2017, Ryanair generated EUR1.47 billion in pretax profit on revenue of EUR6.65 billion.

LaudaMotion is expected to reach profitability by the third year of its operations. That is assuming their plan to grow its fleet to at least 30 Airbus aircraft is successful, Ryanair added.

"We look forward to working in partnership with Niki Lauda to successfully develop his vision for a successful Austrian low fares airline to service the schedule and charter markets," Ryanair Chief Executive Officer Michael O'Leary said. "The LaudaMotion AOC will support a fleet of Airbus aircraft which is something we have hoped to develop within the Ryanair Group for some years."

"LaudaMotion will benefit from this partnership between Niki Lauda and Ryanair", O'Leary added. "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 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", O'Leary continued. "It is also great news for LaudaMotion's people who can look forward to improved job security and more promotional opportunities in Vienna and other bases as we work with Niki Lauda and his team to accelerate growth of LaudaMotion - Austria's low fares airline."

In January, Niki Lauda won the bidding process to acquire the assets of the former Niki airline over British Airways-owner International Consolidated Airlines Group PLC, which had bid EUR20 million.

Shares in Ryanair were 1.1% lower at EUR16.38 in early trading in London on Tuesday.