European Union concerns over Air Berlin bid

Chelsea West
December 14, 2017

The Frankfurt-based airline group hopes to pay 210 million euros (USD250 million) for 81 aircraft from Air Berlin's 140-strong fleet, plus take-off and landing slots, as well as Austrian subsidiary Niki.

The German government, which provided a bridging loan through German bank KfW to Air Berlin when it filed for insolvency in August to help keep it afloat during restructuring efforts, says it regrets the Commission decision.

"The Commission has confirmed that there are no competition concerns relating to this agreement and easyJet now expects to complete the transaction in the near future", it said.

Lufthansa said it still planned to buy Air Berlin subsidiary LGW and would submit a revised proposal, including foregoing slots, to the Commission on Wednesday. "Insolvency and grounding of Niki are now the result", government spokesman Steffen Seibert said in an emailed statement.

The Austrian transport ministry said it would repatriate any Niki passengers stranded overseas by cancelled flights.

Germany's biggest airline, Lufthansa, plans to take over much of Air Berlin, while Britain's easyJet is to acquire a smaller part.

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Vestager previously said that, given its dominant position in domestic air travel, Lufthansa might have to give up certain routes in exchange for approval.

Lufthansa was ready to transfer some of Niki's landing rights to leisure-travel operators Thomas Cook Group and TUI to satisfy European Union regulators, people familiar with the plans said on Tuesday. According to German newspaper Sueddeutsche Zeitung (SZ), Frank Kebekus, Air Berlin's chief insolvency administrator, is now urgently attempting to negotiate a sale of Niki to British travel operator Thomas Cook in order to prevent the subsidiary's insolvency.

"It was clear from the start that Lufthansa and Air Berlin overlap on a very significant number of routes, with clear risks to Austrian, Germans and Swiss consumers and to effective competition", the Commission said.

The EU said it will continue to review Lufthansa's takeover of LGW.

Shares in Easyjet were down 0.1% at 1,438.00 pence Tuesday. It has a deadline of December 21 to approve the deal or open a longer investigation.

Other reports by TheSundaySentinel

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