Ryanair has entered an agreement to take a 24.9% stake in Niki Lauda’s new Austrian carrier, LaudaMotion, with a plan to grow ownership to 75%, “as soon as possible”, subject to EU regulatory approval. The deal wins the airline that International Airlines Group (IAG) and Lufthansa each tried and failed to acquire last year.

Ryanair said it will pay less than 50 million euros ($61.5 million) for the 75% interest in LaudaMotion, although it will provide an additional EUR50 million for start-up and operating costs during the first year.

Vienna-based LaudaMotion, controlled by former Formula One champion Niki Lauda, recently acquired many of the assets of the former Niki Airline, a subsidiary of collapsed carrier Air Berlin that Mr. Lauda formed in 2003. The Austrian airline will soon start a range of scheduled and charter services from Germany, Austria and Switzerland primarily to Mediterranean leisure destinations.

Under the agreement, Ryanair will wet-lease six aircraft to LaudaMotion for summer 2018, increasing the total planned fleet to 21 aircraft, and provide financial and management support to the startup.

Niki Lauda will chair LaudaMotion’s board and oversee the airline’s strategy. Ryanair will work with LaudaMotion’s existing management team.

The startup is expected to be profitable by its third year, when the fleet is expected to total at least 30 Airbus aircraft.

“The LaudaMotion air operator’s certificate (AOC) will support a fleet of Airbus aircraft, which is something we have hoped to develop within the Ryanair Group for some years.

This Laudamotion partnership is good news for Austrian and German consumers/visitors who can now look forward to real competition, more choice and lower fares” Michael O’Leary said.

Source: Ryanair