Lufthansa-Austrian merger becomes official
04 Sep 2009
Lufthansa formally took over the Austrian Airline Group (AAG) at a ceremony in Vienna, assuming control of more than 90% of AAG's shares. Lufthansa chairman and CEO, Wolfgang Mayrhuber, stressed that the struggling carrier would have to become profitable as soon as possible.
"OS has a cost problem, which we can help with in some ways with our own system," Mayrhuber said. "AAG has to become cash neutral from today and cash positive by next year," he said.
Austrian reported losses of €166.6 million ($237 million) in the first half of 2009.
Speaking of the acquisition, Mayrhuber said, "We are keeping to our strategy to become Europe's leading airline group, otherwise we wouldn't have done it." He confessed, however, that he didn't expect the process to get EU clearance would take as long as it did.
Admitting that cost-cutting measures were necessary, Austrian COO Peter Malanik, said that plans for next year were underway and further details would be announced in 4-6 weeks.
Meanwhile, Lufthansa confirmed that it was receiving appeals from troubled European airlines for possible takeovers. But CEO Mayrhuber pointed out that apart from being a cash issue it was also a question of management capacity to be able to handle fresh acquisitions.
Other Lufthansa officials said Austrian would have to integrate into the Lufthansa along with other recent acquisitions, Swiss, SN Brussels and bmi. They said the carrier would use its merger with Swiss as a blueprint for its integration with Austrian.
Lufthansa paid €166 million to AAG shareholders for just under 37 million shares and said it would make all efforts to acquire remaining minority shareholding.
