* Lufthansa proposes solutions on competition concerns * Final decision possible in 2 weeks- source * Lufthansa welcomes positive signals from EU on AUA deal (Adds Lufthansa comments, share price) BRUSSELS/FRANKFURT, July 31 (Reuters) - Lufthansa <LHAG.DE> looked set on Friday to win approval from EU anti-trust authorities to buy ailing Austrian Airlines (AUA) <AUAV.VI> after the German air carrier proposed remedies to address competition concerns. "After talks earlier today about the results of this week's market test, Lufthansa has put forward further improved remedies to address the competition concerns raised in this case," EU Competition Commissioner Neelie Kroes said in a statement. "The draft decision will be submitted to the Advisory Committee of the Member States and a final proposal will be presented, for adoption, to the College of Commissioners as soon as possible," she added. With the committee having only an advisory role in the case, the Commission is expected to back Kroes' proposal. A Commission source said the final decision could be made in two weeks at the earliest. Lufthansa Chief Executive Wofgang Mayrhuber said the airline welcomed the positive signals from Brussels and was counting on a timely formal approval of the deal. Lufthansa aims for a complete takeover of AUA and said it would plan a squeeze-out of the remaining AUA shareholders. The Commission did not say what remedies Lufthansa had proposed, but a source close to the deal earlier said the air carrier would give up some key take-off and landing slots in Vienna to competitors. Lufthansa has asked the Austrian Takeover Commission to extend the Aug. 31 to give it and the Commission more time to reach agreement, after a weeks-long standoff over EU concerns that combining the airlines would affect fair competition. Lufthansa had originally agreed to pay up to 377 million euros ($531.3 million) for AUA and has since had to offer the European Union some concessions on lucrative routes. To offset rising costs of the purchase, AUA on Wednesday approved a 150 million euro savings programme. AUA lost 429 million euros last year and has piled up more than 1 billion euros in debt, or more than five times its equity. It only survived this spring due to a 200 million euro lifeline from the Austrian government, two thirds of which it has used up. Shares of Lufthansa ended the day 1.3 percent lower at 9.48 euros, while AUA's stock was down 2.3 percent at 4.28 euros. (Reporting by Marcin Grajewski, Christian Gutlederer and Mark Heinrich; editing by Rupert Winchester and David Cowell)
