The fate of Austrian Airlines hangs in the balance as the country's caretaker government considers whether to take on a large portion of the struggling flag carrier's €900m ($1.2bn) debt in a bid to facilitate a rescue bid by Germany's Lufthansa.

The German airline was named last month as the sole qualified bidder for the Austrian government's 42 per cent stake. Lufthansa has insisted it will only take on the carrier subject to some debt relief, reflecting the approach it used when it acquired Swiss International Air Lines in 2005, and has given Vienna an early December deadline.