Ryanair rules out bid for Air Berlin

Ryanair is unlikely to bid for any part of broke German carrier Air Berlin but Michael O’Leary has said the Irish airline will continue to expand in Germany.

Earlier this week, Ryanair lodged formal complaints with the European Commission and Germany’s competition authority calling Air Berlin’s insolvency a “conspiracy” to allow Lufthansa buy parts of its competitor and gain a monopoly in Germany.

Air Berlin filed for insolvency on Tuesday after main shareholder Etihad Airways withdrew financial support; prompting the German government via its state development bank to keep it afloat via a €150m bridging loan.

“All this is down to prevent Ryanair growing in Germany, but it won’t stop us,” Mr O’Leary said yesterday.

“A merger will take Lufthansa from 68% to 95% of the German domestic market and from 47% to 60% control of the total German market, which would be in breach of every known competition threshold rule and guideline in Germany and the EU,” he said.

Ryanair has an 8% share of the German market and wants to reach around 20% in the medium term.

Regarding the potential for Ryanair to bid for assets held by Air Berlin, Mr O’Leary said he expected a deal would go through too quickly to give it a chance to bid and that only unattractive airport slots would be offered up.

Mr O’Leary said he hoped the EU authorities would step in to force competition remedies, such as giving up airport slots to rivals.

The German government has rejected any conspiracy claims, saying it expects no competition issues as Air Berlin will be sold off in parts. It has also said it is unlikely the German state will have to foot the bill for any Air Berlin rescue.

“We can say that in all likelihood the taxpayer will not have to pay for that,” chancellor Angela Merkel said.

Meanwhile, Air Berlin has blamed long delays in the opening of a new airport in the German capital for its insolvency.

Berlin’s new airport was meant to open in 2011, replacing Air Berlin’s home airport Tegel and Schoenefeld. Etihad this week said it has withdrawn its funding after Air Berlin’s operations deteriorated at an “unprecedented pace” in recent months.

Air Berlin and Germany’s economic ministry separately said that Lufthansa and another unidentified airline are far advanced with plans for a partial rescue of Germany’s second largest carrier, with a deal potentially being finalised in the coming weeks.

Additional reporting Reuters


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