Lufthansa Buys up More Than Half of Air Berlin

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Air Berlin has confirmed that a deal has been struck with Lufthansa, for the sale of more than half of the company to the German aviation giant. The deal will see Lufthansa snap up Air Berlin’s Austrian leisure airline Niki, as well as the regional carrier LG Walther.

In addition, Lufthansa will also snap up 20 of Air Berlin’s aircraft for its own subsidiary Eurowings. Lufthansa ultimately will be taking on 81 of Air Berlin’s aircraft, in a deal rumored to be worth €210/$249 million. Lufthansa CEO Carsten Spor confirmed that as a result of the acquisition, the company will be investing a total of €1.5/$1.77 billion in its new acquisitions.

Lufthansa Aircraft
Image courtesy of Sam Helmy

While the deal was signed on Thursday, October 12, 2017, it still has to be approved by the European Union Commission. Although both Lufthansa and Air Berlin expect approval to be granted, Ryanair has stated that it will be lodging a complaint with the EU competition authorities, since Lufthansa and Eurowings would be in a very dominant position in the competitive market.

The move is seen as a spoiler by Ryanair which earlier in the year was interested in some of Air Berlin’s routes. The airline dropped out of the race after its disastrous summer.

The other most significant winner from the demise of Air Berlin is likely to be EasyJet, which is in negotiations to buy up about 20-30% of the defunct airline, purchasing between 27-30 of the company’s aircraft. Other carriers like Condor and Thomas Cook will also be snapping up smaller parts of the airline.

Overall

While seeing Air Berlin go bust is likely to reduce competition and provide fewer options for us as travelers, there is finally some good news for some of the employees of the doomed airline, who will see their jobs saved by the acquisition from Lufthansa. Hopefully, the rest of Air Berlin’s staff will also be able to save their employment.

Source: Financial Times & Reuters

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Comments

  • Avatar

    hopefully works out well

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      Want to see who will get Air Berlin’s transatlantic routes . If its Lufthansa then its bad for consumers but if
      Germanwings/Eurowings opens transatlantic flights then its good for consumers because there will be a new budget airline offering seats at discount prices. Cross your fingers

  • Avatar

    It’s great to see that many Air Berlin employees will still have jobs with Lufthansa.

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    It would be important to know the practical effect for the consumers.
    Less competition and increase of prices? I hope no!

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    Good news for the employees. I hope that then they’ll be able to get jobs with LH than just having to search for other employment. I don’t know much about Air Berlin, but I assume that it was headquartered in Germany? Did it fall under the law that the company had to prove why they were hiring anyone outside of a German citizen? Will LH be taking over miles from Air Berlin?

  • Avatar

    This could definitely be a good thing. Depends on how Lufthansa makes use of all these new assets.

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    I hope this purchase by Lufthansa will not raise the air fares flying to Europe. As Lufthansa will be the dominant flyer they can raise the air fares without worrying about competitors. EUC should review this very carefully.

    • Avatar

      Short term it will almost certainly increase prices. Longer term if prices are increased too much the low cost carriers will no doubt see an opportunity to compete on the route.

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    I was on the AirTrain at JFK yesterday, and I saw an employee put up a sticker covering up “Air Berlin” on the board in the train that tells passengers what terminal their airline is flying out of.

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    this is great for the employees

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    Will be very interesting to see what happens to NIKI, which has been a great little airline from Vienna. Hopefully it will stay and join Star Alliance as an affiliate airline if the name stays of course!

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    So, will the German government get their loan repaid?

  • Avatar
    jason picker says:

    Good for AIr Berlin Employees
    Bad for people looking for lower prices

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    It is very bad news that Lufthansa are taking over so much further strengthening their position and reducing competition. It also strengthens Star Alliance and leaves Oneworld with very weak coverage in Europe.

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    Air berlin had no chance to compete with the Lufthansa. The low RASM likely helped driving them out of business

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    As far as I see it, the Prices will rise – which is not a good thing to me….

    So, I’ll miss AirBerlin.

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    I have some AirBerlin miles. I am hoping (without real hope) that some other carrier will buy/eat the miles so that they can count me as a great new customer of theirs. Does anyone have any word on this? Thanks.

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    I have always enjoyed flying Lufthansa to Europe, better service and food than AA and UA.

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    Interesting news!

  • Avatar
    Bertrand Say says:

    So Air Berlin will definitely sail into the sunset.

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    Not surprising. This might actually mean better pay and work rules for the Air Berlin Employees whe are hired by Lufthansa. Though I’m not sure how that works in Europe.

  • Avatar
    angelo fonseca says:

    It is a large concentration of market. At least there is hope for the unemployed.

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    I agree, good airline, but less competition tends to lead to higher prices

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    From what I’ve heard, Lufthansa is great so hopefully this means good things for consumers.