The International Airlines Group, which operates British Airways and Iberia, is to buy Austria's insolvent low-cost holiday carrier Niki, dpa has learned.

With its network of European and North African vacation destinations, Niki declared itself insolvent this month after German carrier Lufthansa withdrew its takeover offer for the airline.

Lufthansa said it abandoned its bid to acquire Niki as part of a deal to take over large sections of now-defunct Air Berlin after the move was rejected by the European Commission on competition grounds.

Founded by former Formula One champion Niki Lauda in 2003, Niki was sold to Air Berlin group in 2011.