AUA

VIENNA (AFP)--The European Commission is split over Deutsche Lufthansa AG's (LHA.XE) takeover of Austrian Airlines (AUA.VI), or AUA, and the long-expected ruling on the deal has been delayed by another two weeks, the daily Der Standard reported on Monday.

Originally, the commission had been scheduled to decide on the takeover of the ailing Austrian carrier by the German rival on July 1.

But Transport Commissioner Antonio Tajani and Competition Commissioner Neelie Kroes cannot agree on a EUR500-million subsidy from the Austrian state at the center of the deal, the newspaper reported, quoting sources in Brussels.

The final decision has now been set back by two weeks and may even see the deal unravel completely, it said.

Der Standard said that Tajani had more or less rubber-stamped the takeover of loss-making AUA by its much-bigger German rival, arguing that it would less expensive than restructuring the Austrian carrier so it that it could survive on its own, placing it in insolvency, or liquidating it completely.

But Kroes had vetoed approval, insisting that the Austrian state subsidy can only be allowed if there is a much deeper restructuring, including a massive reduction of routes, Der Standard reported.