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EU steps in to keep Austrian running

The European Union has approved a EUR 200 million (US$265 million) rescue loan for Austrian Airlines AG as the company awaits approval for its takeover by Germany’s Lufthansa AG.The European Commission said the short-term loan given by the Austrian government complied with EU state aid rules because it offered a loan guarantee based on market rates and was “limited to what is needed to manage the company”.

The Commission’s transport regulators are still studying a December announcement by Lufthansa to buy the Austrian government’s stake in Austrian Airlines.

Under the deal, the German carrier will buy the Austrian state’s 41.56 percent share in the struggling airline.

The Austrian government will also assume up to EUR 500 million (US$663.5 million) of the carrier’s debt, which amounted to EUR 900 million (US$1.2 billion) in November.