A years-long legal dispute between Austrian Airlines (AUA) and investor Mohamed Bin Issa Al Jaber could put a heavy burden on the Austrian airline, as the "Salzburger Nachrichten" recently reported. According to the report, AUA is about to settle with Al Jaber, which could cost it a mid-double-digit million amount - and that's just the direct settlement costs, not including the high sums for lawyers and court proceedings.
The origins of this conflict go back to 2008, when AUA was sold to Lufthansa in a financially strained situation. There had previously been negotiations about Al Jaber's entry, who wanted to buy 20 percent of AUA for 150 million euros through his JJW group of companies. However, AUA did not prove to be in need of restructuring, but rather financially unstable - a fact that prompted Al Jaber to abandon his plan.
AUA then filed a lawsuit against Al Jaber, who in turn responded with a countersuit. In a lengthy process, the Vienna Commercial Court found in April 2023 that Al Jaber's withdrawal was justified. The AUA board at the time had apparently withheld crucial figures and deceived Al Jaber about the actual financial situation. Instead of a forecast profit of 3,3 million euros, a loss of more than 200 million euros was imminent. In addition, it was found that the board had violated its obligations to issue ad hoc reports.
In January of this year, the Vienna Higher Regional Court rejected AUA's appeal against the judgment of the first instance proceedings. This led to new claims for damages from Al Jaber, which pose a financial challenge for Austrian Airlines.
Under the leadership of the new AUA CEO Annette Mann, settlement negotiations with Al Jaber have now been initiated. This step shows a new strategy at the highest corporate level to end a lengthy and costly legal dispute. Neither AUA nor Al Jaber or his representatives have yet made any public comments on the ongoing talks.
The decision to settle could have far-reaching financial consequences for Austrian Airlines, which is already facing a challenging economic environment in the aviation industry. The outcome of these negotiations will not only determine how high the financial burden will be for AUA, but also how this chapter will affect the long-term strategy and reputation of the Austrian airline.
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