EU says no new proposals on Lufthansa/AUA deal

"Intensive discussions have continued over the weekend. No new submission from Lufthansa was received. The Commission is continuing to investigate as normal," an official at the European Union's executive arm told Reuters.

Monday was the deadline for Lufthansa to tell the Austrian takeover commission whether it wants to extend the planned transaction beyond a self-imposed July 31 deadline.

A Lufthansa spokeswoman said the firm remained in talks with the Commission, which regulates big mergers in the 27-nation EU.

On Monday evening, Austrian Finance Minister Josef Proell spoke of notable progress, without giving specifics.

"One can say we have movement on really major issues between the Commission and Lufthansa. We can be more optimistic today than we were last week," he told Austria's ORF state television.

The Austrian daily Kurier quoted sources close to the negotiations as saying Lufthansa was now ready to give up some key takeoff and landing slots involving Vienna to competitors to defuse monopoly concerns at the Commission.

It said Lufthansa was prepared to yield six of 10 slots between Vienna and Frankfurt to other carriers like Austrian low-fare airline Niki and Slovenia's Adria Airways.

ORF said the talks were expected to run past midnight and quoted a Commission spokeswoman as saying a statement could be made from around 9 a.m. (0700 GMT) on Tuesday.

Last week, the EU executive had sought further clarification from the German flagship carrier over new antitrust concessions offered only after Austrian Airlines had agreed to plans for a third savings program.

A source close to the deal told Reuters earlier on Monday that the gap between the Commission and Lufthansa narrowed over the weekend but a quick agreement was unlikely.

"We won't see a deal by today," the source said, adding there could be additional regulatory demands made to Lufthansa.

Lufthansa shares closed down 0.99 percent at 9.495 euros on the German blue-chip index .GDAXI. Austrian Airlines closed 1.24 percent higher at 4.07 euros.

(Reporting by Foo Yun Chee; Additional reporting by Christian Gutlederer and Mark Heinrich in Vienna and Maria Sheahan in Frankfurt; Editing by Dale Hudson and Leslie Gevirtz)