INTERNATIONAL Airlines Group (IAG) has bought out Austrian airline Niki, founded by ex-driver for Formula 1 Niki Lauda.

IAG will be taking over Niki’s routes in Palma

IAG, including British Airways, Iberia, Vueling and Aer Lingus, has paid €20 million for the company’s 21 leased planes with landing rights in Mallorca, Zurich, Vienna, Munich and Düsseldorf.

The British company beat off a rival bid from German carrier Lufthansa and will now set up a subsidiary of Spanish-based Vueling, hiring some 740 Niki employees.

“Niki was the most economically viable part of Air Berlin and its focus on leisure travel fits perfectly with Vueling’s strategy, ” said IAG boss Willie Walsh.