Lufthansa today finally took control of Austrian Airlines closing a deal that has been pending for nine months.

Following all European Commission approvals, the airline bought a share in excess of 90% of Austrian and is expected to take over the remaining shares from small stockholders as a result of a squeeze-out process. Depending on Austrian’s financial performance, the deal could cost Lufthansa up to 362 million euros (US$514 million).

Austrian’s new supervisory board met for the first time on Thursday, too, electing Lufthansa’s executive board member group airlines and human resources Stefan Lauer as its first chairman. Lufthansa CEO Wolfgang Mayrhuber is serving as his deputy. Along with eight additional executives, Swiss CEO Harry Hohmeister is also a member of Austrian’s new board.

Austrian is the third European airline that Lufthansa is taking over this year following BMI and Brussels Airlines.

A newly organized Airline Development Board (ADB) met for the first time on Wednesday with the group executive board members and all airline CEOs participating. The body is supposed to identify the most important topics for integration such as network and IT projects.

Mayrhuber said that Austrian needed to downsize restructure and then grow again. Austrian’s Co-CEO Andreas Bierwirth pointed out that the airline will only grow once it is making operating profits again. The airline has lost 166 million euros in the first half of 2009 and is expected to remain in the red next year. As part of a cost-savings initiative aimed at cutting a further 200 million euros from its annual cost base, the airline is shedding more capacity and around 1,000 of 7,500 jobs.

Source: Aviationweek