IAG International Airlines Group has announced it will acquire insolvent Austrian carrier Niki (HG, Vienna) in a deal valued at EUR36.5 million (USD44 million).

The European carrier conglomerate said in a statement on Friday, December 29, it would acquire the company, its fleet of up to fifteen A320 Family aircraft, and its portfolio of take-off and landing slots at airports including Vienna, Düsseldorf Int'l, Munich, Palma de Mallorca, and Zurich, for EUR20 million (USD24 million). The remaining EUR16.5 million (USD20 million) is to be used to shore up its capital reserves.

The acquisition, which is subject to European regulatory approvals, will be undertaken via a newly created Austrian subsidiary of IAG's Spanish budget carrier unit, Vueling Airlines (VY, Barcelona El Prat). According to the IAG, the unit will operate separately from Vueling initially. It will also incorporate about 740 employees.

"Niki was the most financially viable part of Air Berlin and its focus on leisure travel means it's a great fit with Vueling," IAG CEO Willie Walsh said. "This deal will enable Vueling to increase its presence in Austria, Germany and Switzerland and provide the region's consumers with more choice of low-cost air travel."

Other details concerning the unit's branding and route network will be announced in due course.