Ryanair takes on Austria, teaming up with Niki Lauda

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Ryanair has made a landgrab for flights from Austria, Germany and Switzerland to the Mediterranean. Europe’s biggest budget airline aims to spend €50m (£44m) buying 75 per cent of LaudaMotion, the latest aviation venture of Niki Lauda.

Mr Lauda, the former Formula 1 racing driver, began his career in aviation in 1979 with an airline called Lauda Air. After it was acquired by Austrian Airlines, he launched flyNiki, which was bought by Air Berlin.

After the German airline collapsed in October 2017, Mr Lauda acquired many of the assets, including A320 aircraft, and launched a third airline, LaudaMotion.

Ryanair said it will provide financial and management support to LaudaMotion, and operate six “wet-lease” aircraft for the airline in the coming summer. It will pump in an additional €50m for start up and operating costs in the first year.

Mr Lauda will chair the board of the airline and “oversee the implementation of his strategy to build a successful Austrian low-fares airline”. It is predicted to be profitable by year three, Ryanair said.

The venture marks a significant change for Ryanair which will be noted at Boeing’s headquarters. The Irish airline says it will “grow the business to a fleet of at least 30 Airbus aircraft”. The Ryanair fleet has been exclusively Boeing for 15 years.

Ryanair’s chief executive, Michael O’Leary said: “The LaudaMotion AOC [Air Operator Certificate] will support a fleet of Airbus aircraft which is something we have hoped to develop within the Ryanair Group for some years.

“With access to the Ryanair fleet and financial resources, LaudaMotion will now grow more rapidly as it seeks to compete in a market which is dominated by Lufthansa’s high airfares with its Swiss and Austrian subsidiaries.”

Niki Lauda said: “I have always stood up for competition and have opposed monopolies. Therefore I am thrilled that in the partnership with Ryanair, LaudaMotion will be able to establish itself as a strong competitor and to grow quickly and sustainably.

“A new player in the aviation market is born and I am looking forward to offering our passengers an extensive route portfolio at competitive airfares.”