Ryanair is to take a stake in a new Austrian airline being established by former Formula 1 racing driver Niki Lauda.

The Irish budget carrier wants to support plans to develop and grow Vienna-based LaudaMotion, being formed from the ashes of the former Niki airline which was part of the collapsed Air Berlin group.

The disclosure follows a failed attempt by British Airways parent International Airlines Group to acquire Niki for €20 million.

Ryanair plans to take an initial 24.9% stake in LaudaMotion, rising to 75% for less than €50 milion, subject to EU Competition approval.

Niki Lauda will chair the board of the airline and oversee the implementation of his strategy to build the Austrian low fares airline.

Ryanair will provide financial and management support as well as six aircraft for this summer to enable LaudaMotion run a flying programme with 21 aircraft.

Lauda and Ryanair will work with the existing management team of LaudaMotion and expect the airline to reach profitability by the third year of operations if plan to grow the business to a fleet of at least 30 Airbus aircraft is successful.

Ryanair chief executive 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.

“This LaudaMotion partnership is good news for Austrian and German consumers/visitors who can now look forward to real competition, more choice and lower fares.

“It is also great news for LaudaMotion’s people who can look forward to improved job security and more promotional opportunities in Vienna and other bases as we work with Niki Lauda and his team to accelerate growth of LaudaMotion – Austria’s low fares airline.”

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.”

MoreLauda wins race for Niki [January 26]

Niki founder could buy back airline after it filed for insolvency [January 24]