The Austrian government has appointed advisers on a possible sale of loss-making Austrian Airlines (AUA), a source familiar with the matter said on Tuesday.
The appointment of Merrill Lynch marks the government's first concrete move towards selling its 43 percent stake in AUA, or part of it, as rising kerosene costs weigh on the carrier's bottom line. A capital injection by a Saudi investor failed earlier this year.
Merrill Lynch declined comment. Austria's finance ministry and the government holding company OeIAG also would not comment.
Finance Minister Wilhelm Molterer said last month he was open to all options for AUA, but a strategic partner taking a stake in the national carrier was the most likely scenario.
The Social Democrats, who lead the government in coalition with Molterer's conservatives, have in the past opposed a sale but said they were open to a "strategic partnership".
Airlines including Germany's Lufthansa, already an AUA partner in the Star Alliance, Russia's Aeroflot and Air France-KLM have said they would take a look at AUA if invited to by the government.
AUA predicted last month that it would run up a net loss of up to EUR90 million euros (USD$142 million) this year because of rising fuel costs that it could not compensate for.
