The Austrian government still believes Deutsche Lufthansa (LHA.XE) and the European Commission will reach an antitrust compromise that makes the sale of Austria's flagship carrier Austrian Airlines AG (AUA.VI) to its German peer this summer possible, a finance ministry spokesman said Friday.

"We are in constant contact with both Lufthansa and the commission, and we are convinced they are both working hard to reach a solution," finance ministry spokesman Daniel Kapp told Dow Jones Newswires, dismissing concerns that the two parties may lack the will to seal the deal before a crucial end-July deadline.

Earlier Friday, a commission spokesman said Lufthansa has failed to address the commission's concerns regarding anticompetitive effects of the deal, and that it is now unlikely that the antitrust clearance will be granted before July 31, a deadline condition for the public bid set in the contract by Lufthansa.

"The war of nerves is intensifying, but it is our clear impression that both sides are still working towards a compromise," Daniel Kapp said.

The Austrian Finance Ministry is administratively responsible for the state-entity that holds Austria's controlling minority stake in Austrian Airlines and is, as such, also representing Austria's position on the political level.

Austrian Airlines said they trust that the parties will do their utmost to make sure the deal goes through, a spokeswoman said Friday.

"If the will is there, the merger can definitely function, also with certain antitrust conditions. And we think the will is still there, both on E.U.-side and on Lufthansa-side," Austrian Air spokeswoman Patricia Strampfer said.

-By Flemming E. Hansen, Dow Jones Newswires; +43 1 513 69 22 10; flemming.hansen@dowjones.com