Business News
Austrian Airlines triples expected losses, needs interim financing
Nov 28, 2008, 16:43 GMT
Vienna - Austrian Airlines AG announced Friday that its losses for 2008 would amount to up to 415 million euros (538 million dollars), more than triple the previously forecast net loss of 125 million euros.
The Austrian flag carrier that is expected to be taken over by Germany's Deutsche Lufthansa AG in early December also said it needed interim financing until the European Commission approved the deal.
The widening of the net losses are a result of up to 200 million euros of write-offs of aircraft, which have been losing market value in the current economic climate, as well as from around 90 million euros of negative tax effects.
In addition to the net loss of 415 million euros, results could fall by a further 60 million euros if the airline's security holdings lose more of their value, the company said.
'We are sure that this will not affect the privatization process because Lufthansa is aware of the situation,' an Austrian Airlines spokesperson told Deutsche Presse-Agentur dpa.
As the current owner of the 42.75-per-cent stake to be sold to Lufthansa, Austria's state holding OeIAG has promised to provide up to 500 million dollars to Austrian Airlines, and has agreed to a symbolic sales price.
Austrian Airlines is scheduled to take out interim financing from OeIAG until it receives EU approval for the 500 million euros, the spokesperson said.
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