International Airlines Group (IAG) has announced plans to purchase assets of grounded Austrian airline Niki.

The former Air Berlin subsidiary ceased operations in mid-December, following the decision by the Lufthansa Group not to pursue a takeover of the carrier.

IAG said it would pay €20 million for assets including the operating leases of up to 15 A320 aircraft and slots at airports including Vienna, Dusseldorf, Munich, Palma and Zurich, as well as providing up to €16.5 million liquidity to Niki.

Subject to European Commission competition approval, the transaction will be made by a newly formed subsidiary of IAG member carrier Vueling, and will be incorporated as an Austrian company, initially running as a separate operation.

IAG said that it planned to employ “approximately 740 former Niki employees to run the operation”.

Commenting on the new Willie Walsh, IAG chief executive, said:

“Niki was the most financially viable part of Air Berlin and its focus on leisure travel means it’s a great fit with Vueling. This deal will enable Vueling to increase its presence in Austria, Germany and Switzerland and provide the region’s consumers with more choice of low cost air travel”.

The group said that more details about the airline’s branding and route network will be provided in due course, “when appropriate”.,