International Consolidated Airlines Group (LON:IAG) has snapped up assets of insolvent Austrian carrier Niki, the British Airways and Iberia parent has said. The FTSE 100 company, which also owns Ireland’s Air Lingus, has now added the low-cost carrier to its portfolio of budget airlines which also include Vueling and Level.
IAG’s share price has been little changed in London this morning and as of 08:35 GMT stood at 651.00p, flat in percentage terms. The group’s shares are marginally outperforming the broader UK market, with the benchmark FTSE 100 index having slipped into the red and currently standing 0.36 percent lower at 7,660.14 points.
IAG buys Niki assets
IAG announced in a statement this morning that it was to buy assets of Niki, which was formerly part of the Air Berlin group, for €20 million and provide liquidity to the Austrian carrier of up to €16.5 million. The assets include up to 15 A320 family aircraft and a slot portfolio at several airports including Vienna, Dusseldorf, Munich, Palma and Zurich.
The FTSE 100 group explained that the transaction was made by a newly formed subsidiary of Vueling which will be incorporated as an Austrian company and run initially as a separate operation. The deal is subject to customary closing conditions including approval by Brussels.
“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’s chief executive Willie Walsh commented in the statement, adding that the deal will enable the group’s low-cost Spanish carrier to increase its presence in Austria, Germany and Switzerland.
The deal comes after FTSE 100 peer easyJet (LON:EZJ) recently acquired part of insolvent Air Berlin’s operations, taking advantage of the ongoing industry turbulence.