The owner of British Airways, IAG, is to acquire ailing and bankrupt Australian airline Niki.
According to AFP, BA announced on Friday it will snap up Austrian airline and outlined plans to keep on hundreds of the carrier’s staff.
IAG will pay 20 million euros ($24 million, £17.8 million) for Niki assets and provide liquidity of up to 16.5 million euros to the airline.
Around 740 of Niki’s 1,000 employees will be hired by IAG, which will incorporate its new venture as a subsidiary of its no-frills Spanish airline Vueling.
“This deal will enable Vueling to increase its presence in Austria, Germany and Switzerland and provide the region’s consumers with more choice of low cost air travel,” said IAG chief executive Willie Walsh.
Niki hit turbulence when parent Air Berlin went bankrupt earlier this year and was forced to stop flying on December 14, leaving thousands of passengers stranded.
Lufthansa had been lined up to buy Niki as part of the German carrier’s broader takeover of Air Berlin assets, but dropped the plans over EU competition concerns.
The newly-announced deal will see IAG buy up to 15 planes in Niki’s fleet of around 20, which served resorts in southern Europe and north Africa, as well as take on runway slots at airports including Vienna, Munich and Zurich.
While 2017 has been a bruising year for some European airlines — after the collapse of Air Berlin and Monarch Airlines in the UK, and as Alitalia in Italy went into administration — IAG has bucked the trend.
The Anglo-Spanish group, owner also of Aer Lingus and Iberia, has said it expects underlying operating profit to hit three billion euros in 2017, a 20-percent jump on the year before, thanks to rising demand and falling costs.
BA which created in 1974, is the largest airline in the United Kingdom based on fleet size, or the second largest, behind easyJet, when measured by passengers carried.
The airline is based in Waterside near its main hub at London Heathrow Airport.
In January 2011 BA merged with Iberia, creating the International Airlines Group (IAG), a holding company registered in Madrid, Spain.
IAG is the world’s third-largest airline group in terms of annual revenue and the second-largest in Europe. It is listed on the London Stock Exchange and in the FTSE 100 Index.
It was established by the British government to manage the two nationalised airline corporations, British Overseas Airways Corporation and British European Airways, and two regional airlines, Cambrian Airways from Cardiff, and Northeast Airlines from Newcastle upon Tyne.
On 31 March 1974, all four companies were merged to form British Airways.
After almost 13 years as a state company, BA was privatised in February 1987 as part of a wider privatisation plan by the Conservative government.
The carrier expanded with the acquisition of British Caledonian in 1987, Dan-Air in 1992, and British Midland International in 2012.