Lufthansa to swallow lion’s share of Air Berlin

Lufthansa to swallow lion’s share of Air Berlin

BERLIN - Agence France-Presse
Lufthansa to swallow lion’s share of Air Berlin

Years of struggle for Germany’s second-ranked airline Air Berlin appeared on their final stretch on Oct. 12, as airborne behemoth Lufthansa announced plans to buy more than half the bankrupt carrier’s planes.

The deal has sparked controversy in the European aviation sector, with the German government facing accusations it helped steer the process under a plan to build the Frankfurt-based carrier into an all-conquering juggernaut.

Lufthansa will take over Air Berlin’s Austrian subsidiary Niki, German subsidiary LGW and 20 further aircraft, guaranteeing all jobs at the two smaller firms, Air Berlin said in a statement.

The deal includes 81 of Air Berlin’s 144 aircraft and 3,000 of its 8,500 staff, Lufthansa chief executive Carsten Spohr said in Berlin, hailing it as a “great day” for his company.

Meanwhile, negotiations with Easyjet -- the other bidder chosen for exclusive takeover talks -- “are continuing”, Air Berlin said, offering no information about what the British firm hopes to buy or whether any Air Berlin staff will keep their jobs.

Spohr has suggested Easyjet is interested in up to 30 aircraft.

Lufthansa has yet to say how much it will pay under the deal, but Spohr told newspaper Rheinische Post Thursday that the group would invest 1.5 billion euros ($1.8 billion) in its low-cost subsidiary Eurowings following the takeover.

He added that 80 planes was the largest addition to Lufthansa’s fleet that competition authorities would accept.

“The European Commission will look very closely at this. We will support them,” Andreas Mundt, head of Germany’s federal competition authority, posted on Twitter.

“We will only be able to breathe when the Commission has finally confirmed the transaction,” Air Berlin boss Thomas Winkelmann said in the company’s statement.

Many internal German routes will in future only offer a choice between Lufthansa and Eurowings.

But Spohr told business daily Handelsblatt Thursday that “we expect the competition authorities to examine the takeover at least from the point of view of European competition, not limit it to the German market alone.”    

While the authorities investigate, Air Berlin will operate flights as a subcontractor, as insolvency rules forbid it from flying on its own account after Oct. 28.