Posted on: 13 October 2017
Lufthansa has now signed on the line to buy a substantial part of bankrupt Air Berlin’s assets for €210 million, including the subsidiary airlines NIKI of Austria and regional German airline LG Walter, representing in total 81 of the insolvent operator’s 144 aircraft.
It will also take on 3,000 staff, with European Union approval expected later this year. Germany’s Lufthansa is expected to use the assets to further expand Eurowings, as part of a potentially larger investment of more than €1 billion if the Air Berlin acquisition is given the green light.
“This contract provides new opportunities for jobs for a large part of our workforce. But we can only really breathe again when the EU Commission approves the deal,” said Air Berlin’s chief executive, Thomas Winkelmann, according to Reuters.
Talks to sell other Air Berlin assets to easyJet (possibly up to 30 aircraft) and other bidders are continuing, although a spanner in the works could be that Ryanair is reportedly considering challenging the deal and referring it to the EU competition authorities. Lufthansa has gone on record previously, acknowledging that its 34% market share in Germany would grow by taking over parts of Air Berlin – but also noting its share would be less than 48%, which it added was less than Ryanair’s market share in Ireland.
Lufthansa is Germany’s largest carrier, while Air Berlin was the second largest (and Europe’s 10th largest). The latter reported a record loss of €782 million for last year, while cash injections by major shareholder Etihad Airways failed to save the airline from collapsing into insolvency after the Middle Eastern company eventually decided to withdraw financial support.