You’ve got to feel really sorry for the 1,000 former employees of insolvent budget Austrian airline Niki. On 14th December 2017, the airline was forced to immediately cease its operations when a planned sale to the Lufthansa Group suddenly fell through.
As a subsidiary company of airberlin, which itself had fallen into bankruptcy when its largest shareholder, Etihad Airways Group withdrew funding, the plan was to sell its operations onto Lufthansa in what should have been a smooth transition.
But when the European Commission raised concerns about the sale giving Lufthansa a virtual monopoly in the German and Austrian domestic markets, Lufthansa was forced to give up its bid for Niki. The airline was grounded immediately as administrator, Lucas Floether were appointed to find a new buyer.
Luckily, it didn’t take long to find an investor in the form of IAG – The parent company of British Airways and Iberia, as well as Spanish low-cost airline Vueling. In a €20 million deal, IAG said it planned to buy Niki’s assets and form an Austrian subsiderary of Vueling.
The new airline would take control of 15 former Niki aircraft, up to 740 former Niki employees – many of whom were flight attendants – and what was described as an “attractive slot portfolio at various airports including Vienna, Dusseldorf, Munich, Palma and Zurich.”
At the time, IAG’s chief executive, Wille Walsh said of the deal: “NIKI was the most financially viable part of Air Berlin and its focus on leisure travel means it’s a great fit with Vueling.”
He continued: “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.”
While the European Commission still had to give approval it seemed like a done deal. That was until the administrator hit yet another snag – on this occasion, an objection by a passenger rights group who said Niki should never have applied for bankruptcy in Germany.
The concern was that Austrian passengers who had been affected by Niki’s faliure wouldn’t get the compensation they were owed if the matter was handled in Germany. A court agreed and Niki was forced to start insolvency proceedings in Austria – yet again delaying a sale.
For now, the airline’s former flight attendants have hung up their bright pink shirts and casual denim jeans for good. Some have already moved on and found new employment while new bids continue to be submitted by interested investors.
The deadline for new bids is this Friday and a final decision should be reached within days – IAG is again said to be a front runner but Ryanair has also shown interest. And now the airline’s founder, former F1 motoracing champoin, Niki Lauda wants to take back control.
In a surprising twist, Lauda has written an open letter to the airline’s staff saying he would be able to gauruntee a job for everyone who was employed by Niki when it went under. According to Reuters, Lauda claims he can easily finance the deal although he declined to provide details.
How likely Lauda’s bid is to succeed remains to be seen. Observers believe the Niki brand is all but dead, although the majority of the airline’s staff are still likely to find employment by the successful investor in a matter of days or weeks.
