Tuesday, 20 March 2018

Lauda sells Laudamotion to Ryanair - slowly!

Things are moving fast at Laudamotion, not least its shares, hardly a week after publically launching the airline founded by Niki Lauda is selling out to Ryanair.

The Irish low-cost high-fee budget carrier has entered into a binding agreement to take an initial 24.9 percent stake in the Austrian airline born from the ashes of carrier NIKI that went down with the airberlin collapse.

With the new deal, Ryanair will provide start-up capital and lease six aircraft to Laudamotion to take their fleet to 21 and vastly increase the pace of development. Within the year Ryanair will increase its investment in Laudamotion to 75 percent.

Initially, Niki Lauda will chair the Board of the airline and oversee the implementation of his strategy to build a successful Austrian low fares airline but will step away from the airline towards the end of 2019.

The cost of this 75 percent investment in Laudamotion, which is subject to EU government approval will cost Ryanair a little less than €50m and will see the Irish airline take almost all of the board positions. 

Michael O'Leary the boss of Ryanair said “We look forward to working in partnership with Niki Lauda to successfully develop his vision for a successful Austrian low fares airline to service the schedule and charter markets.  The LaudaMotion AOC will support a fleet of Airbus aircraft which is something we have hoped to develop within the Ryanair Group for some years."

Some aviation analysts have indicated that Niki Lauda has simply been used as the public face of a company that is little more than a shell operation in order for Ryanair to cement its position as the biggest European airline and enable it to pick the bones of the former NIKI airline at rock bottom prices and avoid intense regulatory investigation.  “I have always stood up for competition and have opposed monopolies,” Niki Lauda is reported to have said, “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.” 

The bets are on now as to how long the 'Laudamotion' brand name will be around, "I'd offer put money on autumn 2019 will be the last we see of Laudamotion" our aviation correspondent Jason Shaw offered.