Lufthansa concessions needed for quick AUA deal: EU

By Ilona Wissenbach

BRUSSELS (Reuters) - Lufthansa (LHAG.DE: Quote, Profile, Research) could still win quick European Union regulatory approval for its planned takeover of Austrian Airlines (AUAV.VI: Quote, Profile, Research) if it makes concessions within days, the European Commission said on Thursday.

Speed is crucial for the deal because the German carrier can walk away if it does not get a green light by July 31 -- much earlier than the formal deadline the Commission set on Wednesday when it extended its review of the acquisition.

Asked whether such a quick approval was still on the cards, Commission spokesman Jonathan Todd said: "It is possible. But it is on the condition that Lufthansa comes up with satisfactory remedies within the next few days, otherwise the deadline is November 6."

The Commission, the European Union's executive body, on Wednesday said it was concerned about a lack of competition on routes from Vienna to Frankfurt, Munich, Stuttgart, Cologne, Zurich, Geneva and Brussels if the deal went through.

It said Lufthansa had offered remedies, but not enough to convince the Commission, which therefore had to launch the in-depth probe of the deal. Sources close to Lufthansa said it would not offer further concessions.

Lufthansa had said on Wednesday it was "surprised" by the EU's extended review, but reaffirmed it was "confident" it could complete the takeover nevertheless.

The EU is also reviewing the state aid that is part of the deal. Austria has agreed with Lufthansa to inject 500 million euros ($706 million) into loss-making Austrian Airlines to help cut the airlines' 1 billion euros debt pile.

However, EU sources said the state aid part of the deal was already solved.