BA and Iberia parent IAG still showing an interest in Austrian carrier Niki - sources

FRANKFURT (Reuters) - British Airways and Iberia parent IAG ICAG.L is again interested in Austrian holiday airline Niki after it filed for insolvency, according to two sources familiar with the matter.

“IAG is back again. It’s seeking to strengthen (IAG’s Spanish budget airline) Vueling in Duesseldorf, Berlin and Mallorca,” one of the people said.

IAG had been one of the initial bidders for Niki, a subsidiary of insolvent group Air Berlin AB1.DE and seen as one of its most attractive assets, but IAG lost out to Lufthansa LHAG.DE.

However, Lufthansa last week abandoned its bid for Niki over competition concerns.

Air Berlin’s administrators had been holding fresh talks with potential investors even before Lufthansa dropped its bid, but IAG had withdrawn its interest, the administrators said last week.

With no alternative buyer lined up to replace Lufthansa, Niki was forced to file for insolvency proceedings last week, hours after Lufthansa walked away.

With Niki now in insolvency, that removes some debts and legal uncertainties and means any bidder can expect to pay a lower price.

Holidays company Thomas Cook TCG.L, Ryanair RYA.I, German logistics firm Zeitfracht and former motor racing champion Niki Lauda, who founded the airline in 2003, have all since expressed an interest in acquiring the airline.

IAG declined to comment.

Reporting by Ilona Wissenbach; Writing by Victoria Bryan; Editing by Greg Mahlich