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Austrian Airlines embarks on New Future with Lufthansa

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The Supervisory Board of IAG has given a green light to the sale to Lufthansa of IAGs 41.56% share in Austrian Airlines. The signing of the contract took place last week after a meeting of the Supervisory Board of IAG. 

The acceptance of the Lufthansa bid is the result of a bidding process launched on 13 August 2008 in accordance with EU privatisation guidelines. The process was structured and carried out by IAG and investment bank Merrill Lynch.

Peter Michaelis, Chief Executive Officer of IAG, made the following statement about the conclusion of the transaction, The sale we have concluded is the right decision both for Austrian Airlines and for the business location surrounding Vienna International Airport in general. Partnership with Lufthansa consolidates the status of Austrian Airlines as a leading carrier in Central and Eastern Europe. At the same time, Austrian Airlines will remain a legally independent company, with its head office in Austria and its own brand, crew and fleet. In addition to this, the Lufthansa concept provides for the preservation of the long-haul connections that are so important for the location. The affiliation between Lufthansa and Austrian Airlines therefore offers stability and opportunities for the Vienna hub and for the location as a whole. The Austrian core shareholder structures are to be created by means of a private foundation, the role of which will be to safeguard Austrian interests.

The Chairman of the Executive Board and CEO of Lufthansa, Wolfgang Mayrhuber, added, Austrian Airlines must become profitable again. If it is to do this, all those involved must make a contribution. We are making a considerable commitment with this transaction and are happy to do so. The Austrian Federal Government has also announced its intention to offer support. We also expect this solidarity and responsibility for the future of Austrian Airlines from all other partners, as only in this way can we build a strong, long-term perspective for this well-established airline. The Lufthansa family is very much looking forward to the arrival of Austrian. The two companies already know one another from their successful cooperation in recent years as partners within the Star Alliance. We are all extremely proud to have been selected in the course of the bidding process, and look forward with excitement and confidence to building a successful future together.

Austrian Airlines will remain a broadly independent airline with its head office in Austria, its own brand, fleet and crew, and will be managed as a profit centre in the Lufthansa Group. Lufthansa has agreed to maintain Austrian air traffic infrastructure to the greatest possible extent, taking into consideration the needs of Vienna as a business location, as well as continuing to expand this wherever commercially viable in line with the needs of the market.

Austrian Airlines will retain a presence in the intercontinental aviation sector with its own long-haul fleet, and contribute its own specific key competence to the Lufthansa Group by continuing to build upon its Focus East strategy. At the same time, however, the consolidation with Lufthansa will also enable Austrian Airlines to develop its presence in European air traffic.

Apart from improved access to international passenger flows and joint international marketing, the benefits for Austrian Airlines will consist of using the cost advantages and economies of scale that will result from integration into the Lufthansa Group. Total synergies on the revenue and costs side are estimated at around EUR 80 million p.a.

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