Ryanair Holdings Plc announced on March 20 that it has entered into an agreement with Niki Lauda to support his plan to develop and grow LaudaMotion GmbH, an Austrian airline based in Vienna. LaudaMotion is an Austrian AOC holder, which will shortly start a range of scheduled and charter services from Germany, Austria and Switzerland primarily to Mediterranean leisure destinations.
Under the agreement Ryanair will acquire an initial 24.9% stake in LaudaMotion and this will rise as soon as possible to 75% subject to EU competition approval. Niki Lauda will chair the board of the airline and oversee the implementation of his strategy to build a successful Austrian low fares airline. Ryanair will provide financial and management support to LaudaMotion, as well as six wet-lease aircraft to enable LaudaMotion to complete an extensive 21 aircraft flying programme.
Ryanair says the cost of this 75% investment in LaudaMotion (if approved by the EU) will be less than €50m although it will provide an additional €50m for year one start up and operating costs. Both Mr Lauda and Ryanair will work with the existing management team of LaudaMotion and expect the airline to reach profitability by year three of operations if their plan to grow the business to a fleet of at least 30 Airbus aircraft is successful.
Ryanair’s Michael O’Leary 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.” Niki Lauda, Chairman of LaudaMotion said: “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 air fares.”
