Austrian 'open to takeover'

Alfred Oetsch (REUTERS)


The chief executive of Austrian Airlines said he is open to a majority takeover of Austria's national carrier if that were needed for it to prosper amid soaring fuel costs. In March Austrian announced a return to profit in 2007 but in April it posted a first-quarter loss in earnings before interest and tax of $78 million (Dh286m), much worse than expected, and a potential Saudi-Austrian investor has backed out.

Asked in a newspaper interview whether the airline would consider retaining just a minority stake if it departed from stand-alone ownership, chief executive Alfred Oetsch said: "If so, I am for a clear solution, that is, a majority sale."

He was quoted by Der Standard daily as saying he had a "neutral" approach to such scenarios. Airline management would propose to the supervisory board in the autumn "whether, and with whom, a partnership would be good". Austrian Finance Minister Wolfgang Molterer told national ORF television that Austrian Airlines' future should be resolved by the end of this year.

He said he did not consider the airline to be a candidate for privatisation but could envisage a strategic partner. Oetsch told Der Standard that Austrian had removed major sources of losses and was effectively restructured to be financially stable with 300 million euros in liquid assets and an equity-to-assets ratio of 25 per cent.

But he said sharply rising fuel prices had put the national carrier back under pressure again recently.

"I was deeply convinced before the extreme oil price rise that we could balance AUA (Austrian Airlines) positively in an enduring (way). Now I am no longer so certain," he said.

"Stand-alone was my mandate when I was appointed. We aimed for that with all our strength. But general conditions have changed, now everything is different, and we would anyway (need) to explore stand-alone or partnership options."

An airline spokeswoman told national news agency APA that a majority sale would be considered only if the carrier were no longer in a position to be profitable on its own. "We will explore all possible options. The outcome of this undertaking remains totally open," she said.