Austria's state holding company OIAG is to enter final discussions to sell its shareholding in Austrian Airlines to Lufthansa, after selecting the German carrier as the sole partner for negotiations.

Sources familiar with the situation state that OIAG has formally declared Lufthansa as the company with which it will hold exclusive concluding discussions, and that it hopes to finalise a deal within a month.

Its selection excludes Russian carrier S7 Airlines - which had notified authorities of its interest - from participating further in the privatisation. Air France had also expressed preliminary interest in the proceedings.

OIAG holds about 42% of Austrian which, like Lufthansa, is a member of Star Alliance.

Lufthansa, which already controls Swiss International Air Lines, has recently committed to the acquisition of Belgian carrier Brussels Airlines and is preparing to take a majority shareholding in the UK's BMI.

But it has backed away from tentative discussions about possible involvement in the restructuring of SAS Group, whose main carrier is Star Alliance partner Scandinavian Airlines.

Source: Air Transport Intelligence news