Lufthansa moves on Air Berlin as Ryanair circles

Lufthansa has submitted a letter of interest in Air Berlin’s Austrian budget airline Niki and other parts of the insolvent carrier, according to sources.

Air Berlin, which is being kept in the air thanks to a €150m government loan, has been in talks with interested parties since last week, when it filed for insolvency after major shareholder, Gulf carrier Etihad, said it would no longer provide funding.

Part of Air Berlin’s appeal to bidders lies in its access to take-off and landing slots at airports such as Dusseldorf.

As part of a restructuring earlier this year, Air Berlin transferred leisure routes to tourist destinations in Spain and Greece to its Austria-based unit Niki. Goodbody analysts said buying Niki would strengthen Lufthansa’s position against Ryanair on such routes.

Lufthansa is unlikely to be able to buy all of Air Berlin for competition reasons.

Together the two would control around 95% of German domestic routes. Ryanair boss Michael O’Leary said on Tuesday he would be interested in a bid for Air Berlin as a whole, but complained Ryanair hadn’t been invited to the process, which he sees as favouring Lufthansa.

German aviation investor Hans Rudolf Woehrl, who also wants to buy Air Berlin as a whole, has also criticised the process, saying he was not invited to bid. Thomas Cook’s German airline Condor is also part of the negotiations and EasyJet is also said to be weighing up Air Berlin’s assets.

TUI said it was involved but only in those talks that relate to 14 planes its TUIfly unit rents to Air Berlin. TUI has been seeking options for TUIfly since plans to put it into a leisure-oriented venture with Niki and Etihad collapsed in June.

Any sale will be decided by a creditor committee, which met for the first time yesterday and includes representatives from Air Berlin, the federal labour office which is paying staff wages, Commerzbank, and Eurowings.

Ryanair said, on Tuesday, it would be interested in bidding for Air Berlin if it had access to more data on the airline’s finances. “But we don’t know how much restructuring it will take, how much money is it losing, why is it losing so much money in a market where we make money,” Mr O’Leary said.


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