Aer Lingus owner IAG is in exclusive talks to buy Niki, Air Berlin's insolvent Austrian airline, a source close to the process said today.
The news emerged after Niki's administrator said that one bidder out of four remained.
Besides IAG, which also owns British Airways and low-cost carrier Vueling, bidders for holiday airline Niki included tour operators TUI, Thomas Cook and former Formula One world champion Niki Lauda.
"IAG is the last remaining bidder and is still negotiating now," the person said, adding that the company had put in the highest offer - a double-digit million-euro amount.
German newspaper Bild put the figure at around €40m.
Niki Lauda, Niki's founder, was quoted as saying on the website of newspaper Die Presse that he was out of the running. A source said Thomas Cook was also out of the race.
Die Presse also reported, without citing sources, that IAG was likely to be the last bidder.
IAG and Thomas Cook's Condor subsidiary declined to comment today.
TUI was not immediately available to comment.
"The provisional creditors' committee for Niki today decided to continue sales negotiations for the business operations of the company exclusively with one bidder for now.
"The committee tasked the provisional administrator Floether to conclusively negotiate the purchase contract over the coming days," Floether's spokesman said in the statement.
He declined to give further details.
The new owner will have to pay Niki's running costs, including salaries for its roughly 1,000 employees in Austria and Germany, from the beginning of January, the administrator said yesterday.
Niki was part of collapsed Air Berlin. It filed for insolvency after Germany's Lufthansa dropped a plan to buy Niki's assets on competition concerns, grounding the fleet and stranding thousands of passengers.
The administrators have been racing to find an alternative buyer for its assets before it loses its take-off and landing slots, its most attractive assets.