Austrian Airlines decision in next few weeks-Tajani

BRUSSELS, June 30 (Reuters) - The European Commission will in the next few weeks resolve all issues over the planned takeover of Austrian Airlines AUAV.VI by German carrier Lufthansa (LHAG.DE), the EU's transport chief said on Tuesday.

The EU executive expects to rule by July 1 on the merger component of Lufthana's planned buy of Austrian Airlines, and a decision on state aid linked to the deal is due in a few weeks.

EU Transport Commissioner Antonio Tajani moved to dispel rumours that delays and unresolved issues such as airport slot allocations and flight frequencies might scupper the deal.

"We are working on it. I am confident that we will be able resolve the issues," Tajani told a news briefing in Brussels.

"I remain optimistic that in the next few weeks the Commission will be able to resolve the issues of Austrian Airlines..." he added.

The Commission has to decide on the legality of the 500 million euros ($700 million) state aid from the Austrian government tied to the deal. An exact deadline for this decision is not known.

The European competition watchdog could in theory approve both the merger and the state aid on Wednesday, clearing the way for Lufthansa to complete the deal.

However, it could also approve just the merger and delay the state aid, or open an in-depth probe of up to 90 working days on the merger.

The latter scenarios would not bode well for Lufthansa which had said from the onset it would walk away from the deal if EU conditions of approval are too onerous and if it does not get an approval by July 31.

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[EU-REGS-AID-BACT-RTRS-LEN] For stories on state aid, M&As (Reporting by Bate Felix; Editing by David Cowell)