Austrian Air deal delayed on EU demands -sources

VIENNA, June 29 (Reuters) - Approval for Lufthansa's (LHAG.DE) acquisition of Austrian Airlines (AUA) AUAV.VI is likely to be delayed as the European Union is asking for more concessions, Austrian government sources said on Monday. "It looks as if the decision will be postponed again," one government source said. Austrian state holding company OeIAG owns a controlling stake in loss-making, indebted AUA.

A second source said: "There were demands (by the European Commission) that AUA cuts more flights than initially offered, and those demands are now being looked at by AUA's management in cooperation with Lufthansa."

Lufthansa declined to comment but reiterated that if there was no EU approval by July 31, it could walk away from the deal. AUA and OeIAG declined to comment. (Reporting by Boris Groendahl; editing by John Stonestreet)