Niki Lauda was attempting to win his second Formula One world title when he was almost killed in one of the most famous accidents in the history of motor sport. As his Ferrari caught fire after hitting a bank at high speed during the 1976 German Grand Prix, Lauda lay unconscious in the cockpit. Other drivers stopped and tried to help. One, Arturo Merzario, plunged into the flames to unbuckle the Austrian’s safety harness. Eventually he was extricated and taken to hospital, where he was treated for burns so severe that he was given the last rites.

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At 27, Lauda was young and fit. But his physical toughness was nothing compared to the mental strength that enabled him to survive not just that night but the weeks of treatment that included the reconstruction of his badly burnt eyelids with skin from behind his ears. Half of one of those ears had also been incinerated, but Lauda rejected surgery to rebuild it because it would increase the time before he could get back in the cockpit.

Six weeks later, to general astonishment, he was clambering painfully back into his Ferrari, his wounds bandaged but still weeping. He wanted to prove to his sceptical employer, who had already hired a replacement, that he could still fight for the title. Having missed only two races, eventually he lost his crown to his rival and friend James Hunt. But he came back the following year to win his second championship, and was to take another in 1984.

Lauda, who has died aged 70, retired from the cockpit a year after that third title to pursue his interest in running his own airline. Lauda Air was the first of several such enterprises, an involvement which continued after he had re-entered the world of Formula One, first as a consultant to the Scuderia Ferrari in 1993, briefly as Jaguar’s team principal in 2001, and finally, from 2012, with the Mercedes team as nonexecutive chairman. It was thanks to Lauda’s persuasion that Lewis Hamilton joined Mercedes, winning four world titles in five seasons.

Facebook Twitter Pinterest Niki Lauda in action in his Marlboro BRM during the Race of Champions at Brands Hatch, 1973. The following year he was signed by Ferrari. Photograph: Allsport

Son of Elisabeth and Ernst-Peter Lauda, Niki was born into an old and extremely grand Viennese family whose patriarch, the industrialist Hans Lauda, known as “Old Lauda”, strongly disapproved both of the young Niki’s almost complete lack of interest in formal education and of his obsession with cars. Long before he was old enough to have a licence, Niki was tearing around the family estates in a dilapidated VW Beetle convertible. Later it would be followed by a Mini Cooper and a Porsche 911, all of them obtained with money squeezed out of his mother and his two grandmothers, as well as his salary as an apprentice garage mechanic.

Once his racing career had begun in 1968, he managed to use bank loans – easily secured once the branch managers had glimpsed the family name – to get him through his apprentice years in Formula Vee and sports cars. He was up to his ears in debt by the time he got a drive in Formula Three, where he destroyed a car within the first five minutes of his debut practice session and first encountered Hunt, another man with a youthful penchant for crashing.

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In 1971 the Bicester-based March team accepted £20,000 to take Lauda into their Formula Two team alongside Ronnie Peterson, the highly promising young Swede. They also gave him a drive in his home grand prix, which he failed to finish. At the end of the year March accepted his proposal of a deal for 1972 that would mix F1 and F2 races, although the sponsorship he had agreed with an Austrian bank fell victim to Old Lauda’s influence, and the ensuing telephone call was the last conversation they would ever have.

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Keen to escape the stifling family influence in Vienna, he took a flat in Salzburg with his girlfriend, Mariella Reininghaus, who accompanied him to the races. They had met while skiing and for a first date he took her to the Jägerball, the highlight of Vienna’s social season, both dressed in the required traditional costume. They left, in his recollection, after 10 minutes to head for a nearby coffee house, she in a Dirndl dress and he in knickerbockers.

Although he was now in debt to the tune of £160,000, his fortunes began to change when he contacted Louis Stanley, the self-important boss of the Marlboro-sponsored BRM team, who took him on for 1973 as the No 2 to the Swiss driver Clay Regazzoni. Lauda began to show his speed, not least in practice at Silverstone, where he qualified ninth on the grid for the British Grand Prix, one place ahead of his gnarled teammate. A fifth place at Zolder showed his potential and convinced Stanley to change his arrangement to one whereby Lauda no longer paid to drive but was put on a salary.

Facebook Twitter Pinterest Niki Lauda, right, with his friend and rival James Hunt before the start of the Japanese Grand Prix at Fuji in October 1976, less than three months after his accident. His damaged tear ducts made it impossible for him to blink, and he pulled out of the race after two laps. Photograph: Nick Ut/AP

His promise was noted by Enzo Ferrari, who contacted him in 1973. The Scuderia’s last world title had been won by John Surtees in 1964, and the whole team was now being urgently rejuvenated. The dynamic 26-year-old Luca di Montezemolo, a protege of the Fiat boss Gianni Agnelli, Ferrari’s major shareholder, arrived as team manager, and cars designed by the brilliant Mauro Forghieri were placed at the disposal of Lauda and Regazzoni. Their first season was promising, with the first wins of Lauda’s grand prix career coming in Spain and the Netherlands, earning prize money that enabled him to pay off his debts.

A new car, Forghieri’s 312T, proved to be just what he required in 1975. Nine pole positions and five victories – at Monaco, Zolder, Anderstorp, Le Castellet and Watkins Glen – saw him sweep to his first title, 20 points ahead of the defending champion, Emerson Fittipaldi.

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Five wins in the opening nine races of the 1976 season gave him every hope of consecutive championships, but the accident in Germany in effect ended his hopes. Although he had always enjoyed the challenge of the Nürburgring’s 14-mile Nordschleife, with its 174 corners, he had called on his fellow drivers to boycott the circuit, believing that it was impossible for the organisers to provide enough ambulances, fire engines and marshals with the necessary equipment to ensure the safety of the competitors. The inefficient response to his crash on the second lap of the race, while his car was still full of fuel, amply justified his warning; it would be the last Formula One race held on the full circuit.

In 1975 he had left Reininghaus for Marlene Knaus, whom he met while she was the girlfriend of the actor Curt Jürgens, and they were married within a few months. He was still in with a chance of the title when the Formula One circus went to Fuji in Japan for the last race of the season, where the race was run amid a heavy rainstorm. But his damaged tear ducts were making it impossible for him to blink, and therefore to see properly, and he pulled out of the race after two laps, handing the title to Hunt and earning criticism in Italy.

His relationship with Ferrari had been damaged and although he regained the title the following year, with wins at Kyalami, Hockenheim and Zandvoort, he walked out amid acrimony before the end of the season. He had signed up to drive Bernie Ecclestone’s Brabhams, winning at Anderstorp and Monza in 1978 but, after a barren second season, opted for retirement.

Facebook Twitter Pinterest Niki Lauda, in 1997, inside the cockpit of a Boeing 777-200. He founded his own airline, Lauda Air, in 1979. Photograph: Stefan Hesse/EPA

Even though he sometimes piloted Lauda Air’s planes, the venture was not enough to absorb all his energy. In 1982 he returned to Formula One with the McLaren team, taking his third title two years later by half a point from his young teammate Alain Prost, amassing his total despite having only five wins to the Frenchman’s seven.

At the end of the following season he climbed out of the cockpit for the last time, but his unfailing readiness to offer journalists a brusque but highly quotable opinion – usually something along the lines of “the car is shit” – was not lost to Formula One in his subsequent years as a TV pundit or in managerial roles, during which he never forsook the red baseball cap adopted in 1976 to cover his seared scalp.

Timeline Niki Lauda's career Show Hide Andreas Nikolaus Lauda is born in Vienna, Austria Makes his Formula One debut for March-Ford in his home Austrian Grand Prix Now driving for Ferrari, Lauda wins a Formula One race for the first time at the Spanish Grand Prix Lauda secures his first world title for Ferrari at the Italian Grand Prix, with one race in the season left to go Lauda is burned in a crash on the second lap of the German Grand Prix at the Nürburgring. His injuries are so severe that he is read the last rites, but remarkably, after reconstructive surgery on his face, he returns to racing the same season, only missing two races Lauda takes his second world championship, securing victory with a fourth place finish in the US Grand Prix, with two races to go Founds his first airline - Lauda Air Having left Ferrari for Brabham, Lauda retires from Formula One at the end of the season Lauda returns to the sport, this time driving for McLaren Lauda finishes second behind Alain Prost in the final race of the season, but it is enough to give him a narrow half-point victory overall, and he secures his third world title Wins his 25th Formula One race at the Netherlands Grand Prix Retires from Formula One after competing in the Australia Grand Prix, with an overall record of 3 world championships, 25 wins and 54 podium finishes Returns to Formula One in a consultancy role for Ferrari Takes on the role of team principal of the Jaguar Formula One team Lauda makes another airline venture, low-cost operator Niki. Lauda is sometimes in the cockpit himself Becomes non-executive chairman of the Mercedes team, where he helped bring Lewis Hamilton to the team Lauda dies peacefully, eight months after receiving a lung transplant

When one of his Boeing airliners crashed in Bangkok in 1991, killing 223 people, he did not rest until he had proved to the world – and to the reluctant manufacturer – that the tragedy had been caused by a fault in the plane.

He put his name to two good books, The Art and Technicalities of Grand Prix Driving (1977) and To Hell and Back (1986). The story of his championship battle with Hunt was dramatised by the screenwriter Peter Morgan and the director Ron Howard in the 2013 film Rush, with Daniel Brühl giving a startlingly accurate impersonation of Lauda.

After divorce in 1991 from Marlene, with whom he had two sons, Mathias and Lukas, in 2008 he married Birgit Wetzinger, a flight attendant with his airline, and they went on to have twins, Max and Mia. She and his children survive him.

A lung transplant Lauda underwent last year was a delayed consequence of the fumes and flames inhaled in the inferno in Germany more than four decades earlier.

• Niki (Andreas Nikolaus) Lauda, racing driver and entrepreneur, born 22 February 1949; died 20 May 2019