IAG To Buy Air Berlin’s Austrian Leisure Airline Niki

British Airways and Iberia parent IAG is to buy Air Berlin’s Austrian leisure airline Niki for EUR€20 million (USD$24 million).

International Airlines Group (IAG) confirmed the agreement to acquire the insolvent airline, which will see it take on 740 former Niki staff and 15 Airbus A320-family aircraft.

IAG will provide additional liquidity to Niki of up to €16.5 million and establish a new Austrian subsidiary of its Spanish low cost carrier Vueling to house it.

The deal also includes slots at Vienna, Düsseldorf, Munich, Palma and Zurich airports.

“Niki was the most financially viable part of Air Berlin and its focus on leisure travel means it’s a great fit with Vueling,” IAG chief executive Willie Walsh said. “This deal will enable Vueling to increase its presence in Austria, Germany and Switzerland.”

Niki ceased flying two weeks ago after Lufthansa dropped its offer to buy the airline from its insolvent parent Air Berlin. The German flag carrier said it had become apparent the European competition authorities would not approve Niki’s integration into Lufthansa low cost unit Eurowings.

Air Berlin administrators put Niki back on the block, attracting four interested parties including IAG and the airline’s founder, former racing driver Niki Lauda. The other parties dropped out leaving IAG to negotiate a final deal.

The acquisition is subject to regulatory approval.