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Ryanair grabs Niki in surprise move

 

The world of European airlines has just gotten another, and unexpected, shake-up as Ryanair is buying into, and eventually controlling LaudaMotion, owner of Niki, and headed by ex-racing star Niki Lauda.

Ryanair is paying €50 million for 75% of the company and pledging another €50 million to actually get the company into the air again, and build it up faster. It will get 25% now, and the rest as regulatory approvals come in.

The likely goal for Ryanair chief Michael O'Leary is to grab a sizable hunk of traffic from German-speaking countries to vacation destinations. Currently, Lufthansa group, including Lufthansa, Swiss International, Austrian and Eurowings airlines, has nearly 60% of that business, while Ryanair has just under 8%. Niki may give them a base to snare a bigger chunk. like the 28% share it holds in Italy.

When AirBerlin first collapsed, Ryanair was thought of as a likely bidder for that reason, but then declined to bid; O'Leary charged that the 'auction' had been stacked to make Lufthansa the winner. While Lufthansa did get the bulk of AirBerlin itself, with most of the rest going to EasyJet, Lufthansa was forced to abandon its plan to include Niki when EU officials raised competition issues.

Another deal for Niki which would have seen it become part of International Air Group (British Air, Iberia, Vueling, Aer Lingus) collapsed when courts ruled that as a company headquartered in Austria, its sale had to be approved in Austrian courts, and Lauda emerged the winner, but in need of more investment.

Buying an airline rather than just expanding is a rare experience for Ryanair. Niki will continue to operate under its own name and air operator certificate. And, at its Vienna home base, it will face new competition from Vueling and Wizz, which are both beefing up their operations there.

The best part of every trip is realizing that it has upset your expectations

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