Austrian Airlines says its growth strategy will not be blown off course despite the threatened withdrawal of a Saudi investor.
In an extraordinary spat, an Austrian spokesman from Vienna told ABTN this afternoon (6 May) that Sheikh Mohamed Bin Issa Al Jaber is alleging Austrian CEO Alfred Otsch, ”tried to misinform the Sheikh, the allegation is that Otsch was not honest with the financial status of the company.”
For his part, Otsch has reacted incandescently to the suggestion noting: ”I emphatically reject the allegation of deception, it is completely unfounded.”
Crisis talks are now being held tonight ahead of Austrian”s General Assembly tomorrow morning, at which the proposed withdrawal will be debated. Al Jaber was due to acquire 20% of Austrian”s shares in a deal previously estimated at ”150m ($233m) and which was slated to facilitate Austrian”s expansion into business travel in the Middle East.
Otsch is clearly rattled by any potential exit using some fairly robust language to describe the situation and hinting at ”appropriate steps.” ”We have undertaken everything in order to actively support him [Al Jaber]," he said. "The exit is now in the air and the reasons given for this are not comprehensible for us in any way.
”We expect that Sheikh Al Jaber will comply with the contract. If this should not take place, we shall undertake appropriate steps in order to preserve our rights. I again emphatically reject the allegation of deception, it is completely unfounded. Constructing this as a reason for exit is astonishing.”
Austrian posted a first quarter loss of ”50.1m and Otsch said that the Sheikh had even intended to increase his stake by 4.9% ”taking advantage of the low share price, in the knowledge of this already-disclosed results of the first quarter of 2008.”
The timing of the news seems extraordinary given the General Assembly meeting, but Austrian is striking a bullish tone, insisting that there will be no change to its strategy of increasing central and eastern European growth.
It also insists that the ”lion”s share of losses” were eliminated last year, although it does note that it will ”undertake measures to secure our profitability” due to the difficult industry climate.
Media speculation is now centering on whether Lufthansa would be interested in purchasing Austrian, but a spokeswoman for the German carrier told ABTN: "We are not commenting on the speculation that is in the market." Further efforts will also be made to contact Sheikh Al Jaber.