Vienna/Paris  - The privatisation of Austrian Airlines AG is facing uncertainty as Air France-KLM said Tuesday it had dropped its bid, and a newspaper reported that Deutsche Lufthansa AG had also not submitted a formal offer.

According to the Austrian newspaper Die Presse, only the Russian S7 Airlines submitted a valid bid by the deadline on Tuesday at midday.

An Air France-KLM spokesman told Deutsche Presse-Agentur dpa in Paris that his company had not handed in an offer for buying the 42.75-per-cent stake of the Austrian flag carrier currently owned by the state.

However, Air France-KLM had informed Austrian Airlines that it was interested in continuing talks, the spokesman said.

Both Air France-KLM and Lufthansa thought that the price of around 5 euros (6.7 dollars) per share demanded by the Austrian state holding OeIAG was too high, according to media reports.

Earlier, Air France-KLM had also complained about a lack of transparency regarding the Austrian company's books.

Austrian Airlines stocks closed 13.2 per cent lower at 4.1 euros on the Vienna stock exchange Tuesday.

Tuesday was the deadline for submitting the bids, while final price offers have to reach Vienna by Friday.

OeIAG was scheduled to announce the winning bidder next Monday, but there is a possibility for parliament to extend the privatisation process.

If the holding closed a deal with S7, Austrian Airlines might lose its European Union license, as it would be owned by a non-EU carrier.

Mainly as a result of high fuel costs, Austrian Airlines is set to end the year with a deficit of 125 million euros (178 million dollars). (dpa)