"The ball is now with the EC"
Lufthansa last night (July 16) submitted a new package of concessions to the European Commission (EC) in a bid to win approval of its takeover of Austrian Airlines.
"We have made a new offer to the commission and now it's up to them to decide what they want to do next," a Lufthansa spokesperson said.
"The ball is now with the European Commission."
Lufthansa refused to comment on the details of the latest concessions but confirmed that they involved a number of routes.
"We have done as much as we would do in this business case, so we went to the maximum which we can support in this context," the airline said.
Lufthansa also declined to comment on speculation that it was able to offer further concessions following cost cutting talks with Austrian's trade unions.
"It has been speculated by the media and also in a certain way linked and put in this context by the Austrian finance minister, but we are not commenting on whether there is a link between that programme and the deal," Lufthansa said.
EC regulators, citing competition concerns on routes out of Vienna, last week said a decision could not be reached by July unless further concessions were made.
If Lufthansa's latest offer is rejected, a decision on the EC's probe into the deal may not be made until November 6.
Lufthansa has indicated that it could walk away from the deal if concessions make the takeover of Austrian "uneconomical".
Under the terms of the proposed takeover, Lufthansa can walk away if the deal is not signed by July 31.
But Lufthansa told ABTN it did not want to walk away from talks if EC regulators fail to reach a "quick" decision by the end of July.
Austrian Airlines this week warned that it would need a €1bn cash boost should the deal with Lufthansa fall through, twice the €500m grant promised by the Austrian Government.
Austrian Airlines recently announced it was cutting around 1,000 jobs by mid-2010 to help make savings of €200m by 2012.
Austrian admitted that cuts had been made this year in the hope that the EC would approve its merger with Lufthansa.
Last week an "informal" package of concessions submitted by Lufthansa was quickly rejected by the EC which said the deal had not improved.
The EC said that if Lufthansa came up with "satisfactory remedies (to concerns over competition on several routes) within the next few days," the merger could go ahead.
The EC this month began a second investigation into the takeover, citing concerns that competition could be reduced on routes between Vienna other European cities.
Under the proposed deal Lufthansa agreed to pay the Austrian government €366,268 for its 41.6% stake in its national airline.
The second part of the agreement was that the Austrian state received a "debtor warrant" from Lufthansa which might lead to additional payments.
The last element was that the Austrian government paid Lufthansa €500m for a "capital increase" in Austrian Airlines.
Lufthansa's share offer for Austrian was approved last month by 85% of the shareholders, above the 75% threshold needed under the takeover terms.
The Commission said it was still considering "state support for Austrian Airlines in the framework of a separate investigation under EC Treaty state aid rules."
Earlier this week Lufthansa announced plans to cut costs by €1bn by 2011 including a 20% workforce reduction.
There was no indication whether this cost cutting would affect its takeover plans for either Austrian or British carrier bmi.
www.austrian.com www.lufthansa.com http://ec.europa.eu/index_en.htm