Ryanair has entered into a binding agreement with former Formula One champion Niki Lauda to support his plan to develop a new Austrian airline based in Vienna called LaudaMotion, the Irish Boeing 737 operator announced Tuesday. Austrian AOC holder LaudaMotion has recently acquired many of the assets of the former Niki Airline, including Airbus A320s, with the intention of launching scheduled and charter services from Germany, Austria, and Switzerland mainly to Mediterranean leisure destinations.

Under the deal Ryanair will acquire an initial 24.9 percent stake in LaudaMotion, then expand its holdings to as much as 75 percent, subject to EU competition approval. Plans call for Lauda to chair the board of the airline and oversee the implementation of his development strategy. Ryanair has agreed to provide financial and management support to LaudaMotion and to wet-lease the new airline six airplanes.

Ryanair places the cost of the 75 percent investment in LaudaMotion at less than €50 million, although the Irish airline has agreed to provide another €50 million to cover first-year start up and operating costs. Lauda and Ryanair said they will work with the existing management team of LaudaMotion and expect the airline to reach profitability by its third year of operations, if their plan to expand the business to a fleet of at least 30 Airbus airplanes proves successful.

“The LaudaMotion AOC will support a fleet of Airbus aircraft, which is something we have hoped to develop within the Ryanair Group for some years,” said Ryanair CEO Michael O’Leary. “LaudaMotion will now grow more rapidly, as it seeks to compete in a market which is dominated by Lufthansa’s high airfares with its Swiss and Austrian subsidiaries.”

In January authorities overturned a winning bid for Niki Airline—the former Austrian arm of bankrupt Air Berlin—by British Airways parent International Airlines Group when two courts ruled that the insolvency proceeding must move from Germany to Austria, prompting a new round of bids won by Lauda.

“I have always stood up for competition and have opposed monopolies,” commented Lauda. “Therefore, I am thrilled that in the partnership with Ryanair, Laudamotion will be able to establish itself as a strong competitor and to grow quickly and sustainably.”