Niki gets reprieve in €20m IAG deal.

Grounded Austrian holiday carrier Niki has been given a reprieve after British Airways-owner International Airlines Group (IAG) agreed to buy it for 20 million euros ($US24m). Thousands of holidaymakers were stranded in mid-December after a deal by Germany’s Lufthansa fell through after the European Commission expressed concerns the deal would limit choices for air travellers in Germany, Austria and Switzerland. The Niki acquisition was part of €210m wider deal by Lufthansa to acquire parts of failed German group Air Berlin, which filed for insolvency in August after Etihad Airways withdrew financial support. A second part of that deal, the acquisition of Air Berlin subsidiary and regional carrier LGW, received the green light from EU regulators last month after Lufthansa made concessions. Lufthansa had planned to absorb Niki into its own low-cost operation, Eurowings, but decided to axe the move because it did not believe it would get EU approval. The decision saw the Austrian carrier ground its aircraft in and file for insolvency protection, affecting an estimated 40,000 travellers and casting a pall over the future of hundreds of Niki staff. IAG launched its bid late last week and said it would run the carrier as a subsidiary of Spanish budget carrier Vueling, retaining 740 Niki staff and taking on about 15 Airbus A320 aircraft as well as airport slots in destinations such as Vienna, Dusseldorf, Munich and Zurich. The airline group said it would also invest an additional €6.5 million to boost Niki’s financial liquidity. "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 CEO Willie Walsh said in a statement. "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." Niki was founded by formula 1 racing driver Niki Lauda, who had also expressed interest in re-acquiring the carrier. The IAG deal is still subject to regulatory approval.