Ryanair Buys 75% Stake In Laudamotion (NIKI)

Ryanair has today purchase 24.9% stake in Laudamotion, which acquired NIKI – the Austrian based leisure airline that was once part of Airberlin, and plans to increase it to 75% if approved by the EU competition authority.

LAUDAMOTION

Ryanair will provide 50 million euros in funding and six planes with crews to get the airline going. Laudamotion currently has 15 planes.

Here’s an excerpt from Reuters (access their piece here):

Germany has been slow to open up to low cost airlines, helping to protect home carrier Lufthansa against the march of the likes of easyJet and Ryanair.

Low-cost carriers typically account for about 10-20 percent of traffic at Germany’s airports, while they command an over 50 percent market share in Europe as a whole on short-haul flights.

And here from the Irish Times (access their piece here):

LaudaMotion will shortly begin flying scheduled and chartered services from Germany, Austria and Switzerland to mainly Mediterranean leisure destinations. The carrier will compete in a market dominated by Lufthansa and its Swiss and Austrian subsidiaries.

Mr Lauda said he was “thrilled” at the partnership with Ryanair. “I have always stood up for competition and have opposed monopolies,” he said. “LaudaMotion will be able to establish itself as a strong competitor and to grow quickly and sustainably.

Conclusion

This was quite a move. Lufthansa was buying NIKI first but EU blocked the deal on competitive grounds and rightfully so.

IAG (parent of BA and Iberia) then made a deal but it was deemed invalid and Niki Lauda, who founded the airline, was able to come in and acquire it. Now, Ryanair is basically funding the airline to get it back on its feet.

I have yet to fly on Ryanair but I recently purchased my first ever ticket on EasyJet (will fly early July from Mykonos to Naples). Ryanair is the largest European airline in the number of passengers flown yearly.

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