Image copyright Getty Images Image caption British Airways owner IAG has announced it will buy troubled Austrian airline Niki

British Airways owner IAG says it is to purchase the insolvent Austrian holiday airline Niki for €20m ($24m).

IAG said that it would also provide additional liquidity to the company of up to €16.5m.

Niki was previously owned by Air Berlin, which filed for insolvency in August after its biggest shareholder, Etihad Airways, withdrew financial support.

German carrier Lufthansa scrapped plans to purchase Niki in mid-December.

The European Commission had expressed "deep competition concerns" about a possible Lufthansa purchase of 81 Air Berlin and Niki jets.

It said that would limit choice for air travellers in Germany, Austria and Switzerland.

As a result, Niki grounded its planes, stranding thousands of passengers, after filing for insolvency protection.

The airline was founded by Niki Lauda, the Austrian ex-F1 racing champion, but he sold it to Air Berlin in 2011.

After hearing about the grounding, Mr Lauda said that he put in a bid to buy the airline back.

IAG said it will run the airline as a new subsidiary of its budget carrier Vueling, retaining about 740 former Niki staff. The assets include about 15 planes, as well as slots in airports such as Vienna, Munich and Palma.

The deal requires approval by European authorities.

The European Commission has approved EasyJet's purchase of some Air Berlin assets, ruling that there is no breach of EU competition policy.