Austrian Airlines chief favours majority sale in case of partnership

Austrian Airlines chief favours majority sale in case of partnership
AFP - Friday, May 16 08:42 pm

VIENNA (AFP) - Austrian Airlines chairman Alfred Oetsch said he would favour a majority sale of the loss-making airline in the event of a strategic partnership, in an interview to be published Saturday.

"If that's the case, then I favour a clear solution, in other words a majority sale," Oetsch said in the interview with the Austrian daily Der Standard.

Austrian Airlines (AUA) is considering a partnership with one or several other airlines, as a deal with a would-be investor, Saudi billionaire Mohamed Bin Issa Al Jaber, appears to have hit the rocks.

Al Jaber agreed in March to acquire a 20-percent stake in the airline but then said last week he wanted to pull out of the deal, claiming management had misled him on the company's finances.

Among AUA's potential suitors are now Germany's Lufthansa, Air France and Russia's Aeroflot.

"In the autumn, we will give the board of directors our recommendation, whether and with whom a partnership would be good," Oetsch told Der Standard.

"What is important is that the Austrian (Airlines) brand remains and that it will fly as much as possible in and out of Vienna."

"The dangers for the Austrian economic place must be kept to a minimum. These things must be weighed up, switching alliances alone would cost hundreds of millions," Oetsch also said.

A partnership with Air France for instance would necessitate AUA leaving its current Star Alliance to sign up to the French carrier's Sky Team.

AUA showed its first full-year profit in four years in its 2007 results but was driven back into a first-quarter loss this year, due to tougher competition and high fuel prices.

"I was deeply convinced, until the extreme hike in the price of oil, that we could succeed, with our own restructuring measures, in ensuring a sustainable balance sheet for AUA," Oetsch said.

"Now I'm not so sure."