Lufthansa confirms €210m deal for parts of airberlin

by Steve Creedy - editor
431
October 13, 2017
Air Berlin Lufthnasa
Lufthansa has agreed to buy parts of the Air Berlin group.

Lufthansa has agreed to buy units of the insolvent Air Berlin group for 210 million euros ($US249m).

The acquisitions include leisure airline NIKI, regional operator Luftfahrtgesellschaft Walter, Air Berlin said in a statement Thursday.

The deal still needs regulatory approval and German regulators have vowed to look at it closely.

The statement said the combined purchase price would be subject to “adjustments upon the closing of the transaction’’.

Lufthansa will take 81 planes and hire 3,000 people from Air Berlin as part of an overall investment of €1.5 billion, according to German media reports.

The Lufthansa deal was widely expected but that did not stop Irish budget carrier Ryanair from threatening to take it to European competition authorities.

The LCC, at on one stage flagged a s a potential buyer of Air Berlin assets, has been critical of the deal because it believes it strengthens Lufthansa.

“We will be referring the matter to the EU competition authority in due course,” a Ryanair spokesman told the BBC.

The German carrier is due to end operations at the end of the month and has warned staff that they need to look for new jobs.

A widely reported letter to staff from chief executive Thomas Winkelmann and general representative Frank Kebekus said the airline would end flights on October 28 at the latest.

Unlike the shock collapse of UK-based Monarch Airlines, airberlin’s demise was not unexpected after a string of losses and a decision by major shareholder Etihad Airways to no longer provide funding.

It has been kept flying thanks to a 150-million-euro German government bridging loan that administrators are now optimistic can be repaid.

It has been a bad period for European flyers with Air Berlin and Alitalia in administration, Monarch ceasing to trade and Ryanair grappling with rostering problems that have seen thousands of flights cancelled.