Ryanair has agreed to acquire a 24.9% stake in Niki Lauda’s new airline, LaudaMotion, with plans to increase this to 75% as soon as the move receives the green light from EU regulators. This is a significant win for Ryanair, especially since both the International Airlines Group (IAG) and Lufthansa tried and failed to buy this airline last year.
Ryanair mentioned that it will pay less than 50 million euros, which is about $61.5 million, for the 75% stake in LaudaMotion. Additionally, they will contribute another 50 million euros to cover start-up and operating costs in the first year.
LaudaMotion, based in Vienna and controlled by ex-Formula One champion Niki Lauda, recently acquired many assets from the now-defunct Niki Airline. Niki Airline was a part of the bankrupt Air Berlin and was originally founded by Niki Lauda in 2003. Soon, LaudaMotion will launch various scheduled and charter flights from Germany, Austria, and Switzerland, primarily targeting leisure destinations around the Mediterranean.
As part of the deal, Ryanair will wet-lease six aircraft to LaudaMotion for the summer of 2018. This will bring the total number of planned aircraft to 21. Ryanair will also offer financial and managerial support to the new airline.
Niki Lauda will serve as the chairman of LaudaMotion’s board and will be in charge of the airline’s strategic direction. Ryanair plans to collaborate closely with LaudaMotion’s current management team.
LaudaMotion is expected to start turning a profit by its third year, by which time the fleet is projected to grow to at least 30 Airbus aircraft.
The partnership between Ryanair and LaudaMotion will be beneficial for travelers in Austria and Germany, providing them with more competition, greater choice, and lower fares.