LAUDA REUNITED WITH HIS AIRLINE
Former Formula One champion who narrowly avoided death will buy back the eponymous carrier he started
The Former Formula One champion Niki Lauda has agreed to buy back the Niki airline he founded after his bid was chosen ahead of an offer from British Airways owner IAG, the Austrian company’s administrators said yesterday.
A previously agreed sale of Niki to IAG fell through this month after two courts ruled that the insolvency proceedings had to move to Austria from Germany.
Lauda weighed in after an Austrian court appointed an administrator for Niki on January 12, in response to legal action brought by a passenger rights group seeking to recover money it says the airline owes.
That turn of events followed the reversal of an earlier decision by a Berlin court to locate the insolvency in Germany.
“The insolvency process is finally there where it belongs - in Austria,” Lauda said at the time. “I regret that so much time was wasted with the detour through Germany.”
That cleared the way for other interested parties such as budget airline Ryanair and Lauda to bid for the carrier, which most recently was part of failed German airline Air Berlin. Niki’s creditors met on Monday to pick the best bid, and their meeting ran past midnight.
“In the early hours of this morning Laudamotion emerged from a transparent bidding process as the best bidder,” Niki’s Austrian and German administrators said, referring to a company controlled by Lauda. They said they expected legal approval for the transaction to follow soon.
Lauda, who founded the airline in 2003 and sold it to Air Berlin in 2011, said the involved parties had agreed to not disclose the purchase price.
“I am delighted,” Lauda said in an interview with Austrian broadcaster Oe24. “There’s no doubt that I have always put my heart and soul into Niki.”
He said he secured 15 aircraft and planned to bring Niki back into operation by end of March. Lauda, who was three times Formula One world champion, moved into the airline industry as his driving career was coming to an end in the 1980s.
All Niki employees – of whom there were about 1,000 last month – can hope to keep their jobs after Lauda improved an earlier offer and showed “commitment to Niki’s base in Austria and openness to negotiating a collective agreement”, the Niki works council chief Stefan Tankovits told radio station ORF.
Lauda said earlier that he would look to work with an operating partner such as Thomas Cook for functions previously provided by Air Berlin, such as ticket sales, crew planning and marketing.
IAG said yesterday that its offer – which in the previous sale process involved it securing the company for €20 million (Dh89.4m) plus a €16.5m liquidity injection, well below the €210m offered by Lufthansa before it dropped out over competition concerns – had been unsuccessful, the
Financial Times reported. Lauda’s company had emerged as the best bidder in a transparent auction process, Niki’s administrators said, according to Reuters
Niki filed for insolvency in Berlin last month after Germany’s Lufthansa scrapped plans to buy the Austrian arm of insolvent Air Berlin.
After hurried talks to ensure Niki retained valuable runway slots, IAG agreed at the time with the German administrator that it would buy the business for €20m and provide €16.5m in liquidity to make it part of its low-cost business Vueling. It accepted its defeat yesterday.
“IAG is disappointed that Niki will not be able to develop and grow stronger as part of the group,” it said.
Lauda narrowly avoided death in an F1 crash in 1976 after his car burst into flames, badly scarring him for life. However, in an interview with
The Guardian in 2006, he said his darkest days came not after the horrific accident but from the crash of a plane belonging to Lauda Air, set up in 1979 by the racing driver, which became a wholly owned subsidiary of Austrian Airlines in December 2000 and which ceased to exist in 2013.
The 1991 air crash took the lives of more than 200 people.
“People always think that the worst time of my life must have been after the German Grand Prix crash in 1976, which put me in a coma and left me with severe burns,” he told the UK newspaper.
“But it wasn’t. In 1991, one of the planes from Lauda Air, the airline I had set up, crashed in Bangkok, killing 223 people.
“The effect of the disaster was enormous. When I was motor racing, I had taken the decision to risk my life. But when you run an airline and more than 200 people want to go from A to B and they don’t arrive – that’s a different responsibility.”
The aviation industry has been in turmoil over the past 12 months, with the British airline Monarch, Italy’s Alitalia and Air Berlin entering administration, following intense price competition in Europe. The Hungarian low-cost airline Wizz Air is interested in Italy’s struggling carrier Alitalia but only regarding short and medium-haul routes, the chief executive Jozsef Varadi told La
Repubblica newspaper in an interview on Sunday.
Alitalia, which has made a profit only a few times in its 70-year history, was put under special administration last year after staff rejected a plan to cut jobs and salaries.
“We are interested in the Italian market ... as far as Alitalia is concerned, we are only looking at the parts that are of interest to us, the short and medium haul; certainly not for the intercontinental flights,” Mr Varadi told the paper, adding he would be visiting Italy in the coming weeks.
Germany’s Lufthansa, the British low-cost carrier easyJet and the US private equity fund Cerberus are among companies that have expressed an interest in Alitalia.
When you run an airline and more than 200 people want to go from A to B and don’t arrive, that’s a different responsibility