Vienna, 13 Aug. 08 (Vienna Review / The Earth Times ) - Austria's government Tuesday cleared struggling flag carrier Austrian Airlines AG for privatization by the end of the year, formally opening the gate for potential buyers.

Under a rescue plan backed by Austria's governing parties, the government will offer its 42.75 per cent of the airline for sale, but a controlling minority stake will be reserved for Austrian investors.

Finance Minister Wilhelm Molterer said Tuesday's cabinet decision allows Austrian Airlines "to look for a partner," but that no decision on a partner had been made, the Austria Press Agency reported. German carrier Deutsche Lufthansa has indicated an interest in the airline, which lost a net 48.7 million euros (76.5 million dollars) in the first half of 2008, mainly due to soaring fuel costs and a slower global economy. The company had debts of 898 million euros (1.4 billion dollars) on June 30. The 50-year-old airline, based in a country of 8 million people, has more than 8,000 employees and 99 planes. Austrian financial groups and a government-controlled holding company currently hold 50 per cent plus one share of the airline's capital.

Austrian Airlines share price spiked up more than 3 per cent Tuesday on the Vienna stock exchange, fetching 4.25 euros in afternoon trading.

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