Saturday 21 April 2018

Critical Ryanair on the sideline as Air Berlin bids pour in

Ryanair boss Michael O'Leary
Ryanair boss Michael O'Leary

Gretchen Friemann

Ryanair yesterday reiterated its criticism of Air Berlin's asset fire sale as an agreement to carve up Germany's second largest airline looks set to be agreed by September.

The Dublin-based airline's sustained attack comes despite weekend reports that more than ten parties held talks with the insolvent airline about acquiring parts of the business.

In a newspaper interview, Air Berlin's chief executive, Thomas Winkelmann, said the airline would be parcelled off to "two or three bidders" rather than sold solely to Lufthansa.

The comments are aimed at easing a growing row over competition concerns. He also said a deal would be agreed by next month at the latest.

Last week Ryanair claimed the sale of Air Berlin's assets to Lufthansa was part of a "conspiracy" designed to deliver a monopoly to the Germany's national carrier and ultimately thwart the Irish airline's expansion in Germany's booming aviation market.

The fear is that Luftansa's swoop on its nearest rival will swamp competition, particularly from budget airlines Ryanair and EasyJet.

On Tuesday the Dublin-based carrier lodged a complaint with German authorities and the European Commission over what it alleged was an "obvious conspiracy" between the German government, Lufthansa and Air Berlin to carve up the airline.

Ryanair CEO Michael O'Leary called for a "fair and open" sales process and said other airlines should be allowed to enter the process.

But in a radio interview over the weekend, Germany's deputy economy minister, Matthias Machnig, refuted the accusations, insisting that Mr O'Leary was welcome to play a role in Air Berlin's restructuring. "I am entirely willing to discuss the matter," Mr Machnig said.

When asked to comment on the reports, a spokesperson for Ryanair said its stance on the matter has not changed.

The airline also declined to comment on whether it has since held any talks with Air Berlin about acquiring some of the carrier's assets.

EasyJet and Thomas Cook's German airline, Condor, are reportedly involved in the carve-up talks, while on Friday it emerged that aviation entrepreneur Hans Rudolf Woehrl, who bought German airline Deutsche BA from British Airways for €1, has also entered the fray.

Last week Mr O'Leary told media he has not been approached by the Air Berlin, which filed for insolvency after its main shareholder, Etihad Airways, withdrew financial support.

That prompted the German government to throw the carrier a temporary lifeline in the form of a €150m bridging loan. The cash is aimed at keeping the carrier aloft until November.

But Ryanair branded the emergency cash as "state aid" and claimed the intervention would "drive domestic air fares in Germany even higher than they already are".

The Irish airline holds an 8pc foothold in the German market and wants to increase that to 20pc within a couple of years.

On Thursday Ryanair's chief marketing officer, Kenny Jacobs, told this newspaper that the airline would have been interested in acquiring slots at German airports that are currently being used by Air Berlin if a "normal" sales process has been initiated.

He said Ryanair will continue to "grow organically, adding new aircraft, new bases and new frequencies".

While Mr O'Leary's objections are unlikely to stymie the sale of Air Berlin's assets to Lufthansa, the complaints have piled pressure on the German authorities and thrust the restructuring firmly into the spotlight.

In his radio interview Matthias Machnig said it would not be possible to secure the takeover of Air Berlin as a whole, and emphasised Lufthansa would not be the only buyer of the carrier's assets. However reports said Lufthansa intends to buy up to 70 of Air Berlin's planes and take on 2,000-3,000 of its 8,600 employees.

(Additional reporting Reuters)

Irish Independent

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