Saturday 17 March 2018

Lufthansa leading Air Berlin asset race amid carve-up claim

Air Berlin filed for bankruptcy. Photo: AP
Air Berlin filed for bankruptcy. Photo: AP

John Mulligan and Erich Zann

Lufthansa is considering buying a majority of Air Berlin's fleet of aircraft as the German government and rivals race to carve it up, according to sources.

Ryanair chief marketing officer Kenny Jacobs lashed out this week at the fire sale of the insolvent Air Berlin's assets, saying the German government was "salami slicing" the failed carrier while excluding other airlines from the process. The German authorities have denied the charge.

Air Berlin, Germany's second-largest airline, filed for bankruptcy protection on Tuesday after shareholder Etihad Airways withdrew funding following years of losses.

The insolvency comes as many Germans enjoy summer holidays, and just ahead of a September general election, both factors which have put pressure on the German government to help minimise travel disruptions and job losses.

Transport Minister Alexander Dobrindt backed Lufthansa to buy a major portion of Air Berlin's assets, saying Germany needed a "national champion" in international aviation.

"That is why it is urgently necessary that Lufthansa can take over significant parts of Air Berlin," he told daily newspaper 'Rheinische Post'.

Berlin has granted a bridging loan of €150m that will keep Air Berlin's planes in the air for up to three months, bringing holidaymakers home and securing 7,200 jobs in Germany while buyers for its assets are found.

Air Berlin's demise offers Lufthansa and rivals a chance to acquire slots at airports such as Berlin Tegel and Dusseldorf, with Germany's largest airline keen to defend its domestic position against Ryanair.

Ryanair has about an 8pc share of the German market. Mr Jacobs said following Air Berlin's demise, it could have 20pc within a couple of years.

One scenario Lufthansa's chief executive Carsten Spohr has apparently presented to the flagship carrier's supervisory board is that it could take on as many as 90 of Air Berlin's roughly 140 planes, all of which are leased.

That would include 38 aircraft Lufthansa is already leasing from Air Berlin.

The 'Sueddeutsche Zeitung' newspaper earlier cited company sources as saying that Mr Spohr was due to hold talks with Air Berlin's administrator and its management today.

RedaktionsNetzwerk Deutschland (RND), a group which represents German newspapers, cited government sources as saying that Lufthansa, its budget carrier Eurowings and Thomas Cook's German airline Condor would likely snap up Air Berlin's most valuable landing slots. A source has said EasyJet was also part of the negotiations.

RND said a few slots could also go to Ryanair, which has filed a complaint with German and European Union competition authorities over the insolvency process. (Additional reporting Reuters)

Irish Independent

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