OIAG PRESS RELEASE

Austrian Airlines: ÖIAG Supervisory Board recommends that Government award privatisation mandate

Vienna, August 1, 2008

In its meeting today, the Supervisory Board at ÖIAG, the main shareholder in Austrian Airlines AG with 42.7% of total share capital, resolved to issue a recommendation to the Austrian Federal Government to continue privatisation of the company.

Following exhaustive analysis, the Supervisory Board at ÖIAG has reached the conclusion that Austrian Airlines can only continue to build upon its strengths – in particular its successful positioning in Eastern Europe, the Levant and Middle East – working together with a strategic partner, while the marked deterioration of the industry environment in recent months means that the stand-alone strategy would be associated with a package of drastic measures.

Concerns over location policy can also be best addressed by a partner. The Vienna hub is to large extent reliant on transfer traffic which is only guaranteed by AUA, and the safeguarding of which through a strategic partnership is of real importance in location policy terms.

ÖIAG Chief Executive Officer Peter Michaelis: “Particular attention is being paid in this context to the approximately 65,000 jobs that are either directly or indirectly dependent on air traffic, and consequently AUA. When all its supplier companies are taken into consideration, Vienna Airport generates total added value of around 4.8 billion euros per annum. Safeguarding of the location and its knock-on effect on employment – every million passengers handled there guarantee approximately 3,500 other jobs – can best be achieved by finding a strategic partner for AUA. A range of different options exists in theory for such a partnership. The question of which potential partner would contribute the most favourable concept for the company and its shareholders can only be clarified by means of negotiations. To begin these negotiations, ÖIAG now requires the necessary political mandate.”

ÖIAG Chairman of Supervisory Board Peter Mitterbauer: “Examples from around the world confirm that strategic partnerships between companies in the aviation sector produce competitive advantages. This is true both of the airline itself and of its domestic hub location. All facts and analyses necessary to reach a decision are now in the public arena. Under the present circumstances, in which the aviation sector is undergoing a period of increasing consolidation, the search for a partner cannot be put off a moment longer. It is also important that the privatisation mandate of ÖIAG should provide the greatest possible room for manoeuvre. This is why ÖIAG should be granted the opportunity to realise its full share in the company during negotiations. This is the only way to maximise the likelihood that the transaction will be a successful one. At the same time, specific privatisation aims, such as preservation of the brand and a reasonable route network, should be defined to protect the interests of the company and business location.”

For further details please contact:
Österreichische Industrieholding AG           
Anita Bauer           
Dresdner Strasse 87, 1201 Wien
T: +43/1/711 14-240
M: +43/664/13 40 333
E: Anita.bauer@oiag.at