IAG is to acquire the assets of Austrian leisure carrier Niki for €20 million ($24 million) and provide liquidity of up to €16.5 million.
The purchase will be made by a newly formed subsidiary of IAG's Spanish low-cost carrier Vueling, says the group. The transaction is subject to regulatory approval by the European Commission.
To be incorporated in Austria, the new subsidiary will operate separately from Vueling initially, says IAG. The new company plans to employ around 740 former Niki employees to run the operation, and further details of its branding and route network will be announced "in due course", the group adds.
"Niki was the most financially viable part of Air Berlin and its focus on leisure travel means it's a great fit with Vueling," states IAG chief executive Willie Walsh. "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."
The Niki assets include up to 15 Airbus A320-family aircraft and slots at several airports including Vienna, Dusseldorf, Munich, Palma and Zurich.
Niki, a subsidiary of insolvent Air Berlin, itself filed for insolvency on 13 December after Lufthansa dropped its plan to acquire the Austrian outfit.