Ryanair has entered into a binding agreement with Niki Lauda to develop a Vienna-based low-cost airline, LaudaMotion.
LaudaMotion has recently acquired many of the assets, including A320 aircraft, of the former Niki Airline.
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.
The airline will shortly launch scheduled and charter services from Germany, Austria and Switzerland mainly to Mediterranean holiday destinations.
Niki Lauda will chair the Board while Ryanair will provide financial and management support and will also provide six wet-lease aircraft.
If approved, the 75% investment in LaudaMotion will be less than €50 million, although Ryanair will provide an additional €50 million for year one start up and operating costs.
BothLauda and Ryanair will work with the existing management team of LaudaMotion and expect the airline to reach profitability by its third year of operations.
They ultimately plan to grow the business to a fleet of at least 30 Airbus aircraft.
Ryanair chief 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. 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.
"LaudaMotion will benefit from this partnership between Niki Lauda and Ryanair. With access to the Ryanair fleet and financial resources, LaudaMotion will now grow more rapidly, as it seeks to compete in a market which is dominated by Lufthansa’s high airfares with its Swiss and Austrian subsidiaries."
Niki Lauda said: "I have always stood up for competition and have opposed monopolies. 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."
