Ryanair partners with Niki Lauda's latest airline venture

Ryanair Holdings has entered into a binding agreement with former F1 driver and veteran airline entrepreneur Niki Lauda, it announced on Tuesday, to support his plan to develop and grow LaudaMotion - an Austrian Airline based in Vienna.

The Dublin-based low-cost giant said LaudaMotion is an Austrian AOC holder owned by Niki Lauda, which recently acquired many of the assets - including A320 aircraft - of the former Niki Airline.

It would shortly start a range of scheduled and charter services from Germany, Austria and Switzerland, primarily to Mediterranean leisure destinations.

Niki Airline was established by Lauda in 2003, before merging with the now-defunct Air Berlin in 2011.

Lauda had also previously set up Lauda Air in 1979, before it was absorbed into Austrian Airlines in 2000.

Under the agreement, Ryanair would acquire an initial 24.9% stake in LaudaMotion, which would rise “as soon as possible” to 75% subject to EU competition approval.

Niki Lauda would chair the board of the airline, and oversee the implementation of his strategy to build a new Austrian low fares carrier.

Ryanair said it would provide financial and management support to LaudaMotion, as well as six wet-lease aircraft for summer 2018, to enable LaudaMotion to complete an extensive 21 aircraft flying program.

Wet leasing is the aviation practice of leasing an aircraft replete with crew, maintenance and insurance, with the lessee usually paying an amount based on total flying hours.

The cost of the 75% investment in LaudaMotion, if approved by the EU, would be less than €50m, although Ryanair said it would provide an additional €50m for first-year start up and operating costs.

Both Lauda and Ryanair would work with the existing management team of LaudaMotion, and expected the airline to reach profitability by its third year of operations if their plan to grow the business to a fleet of at least 30 Airbus aircraft was successful.

“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,” said Ryanair’s chief executive Michael O'Leary.

“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.”

O’Leary said LaudaMotion would benefit from the partnership between, having access to the Ryanair fleet and financial resources to now grow more rapidly as it seeked to compete in a market dominated by Lufthansa's and its Swiss and Austrian subsidiaries - all full-service and full-fare airlines.

“This LaudaMotion partnership is good news for Austrian and German consumers and visitors who can now look forward to real competition, more choice and lower fares.

“It is also great news for LaudaMotion's people who can look forward to improved job security and more promotional opportunities in Vienna and other bases as we work with Niki Lauda and his team to accelerate growth of LaudaMotion - Austria's low fares airline.”

Ryanair also said the partnership provided job security, career opportunities and growth in employment in all activities of LaudaMotion, such as cockpit and cabin crew, maintenance and administration, and would allow consumers and visitors to benefit from strong competition, leading to more choices and lower fares.

“I have always stood up for competition and have opposed monopolies,” said LaudaMotion chairman Niki Lauda.

“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 air fares.”