Lufthansa buys up most of Air Berlin
Plans to invest 1.5 billion
GERMAN airline Lufthansa is to buy large parts of insolvent rival Air Berlin, said Lufthansa chief executive Carsten Spohr, with plans to invest 1.5 billion (R24.12bn) into the takeover of the nation’s second-biggest carrier.
Lufthansa and Air Berlin were to sign a contract later yesterday to acquire sections of the embattled carrier, which filed for insolvency in August after its main shareholder, Abu Dhabi-based Etihad Airways, halted financial aid for the group.
“This is indeed a big day, which we’re going to seal with a signature in a few hours,” Spohr said, sending Air Ber- lin’s shares rocketing up by 51 percent in early morning trading on the Frankfurt Stock Market.
Investors believe that Lufthansa will profit from the debt-laden Air Berlin’s breakup, driving up shares in the Cologne-based group by 2.4 percent, to 25.6, on the Frankfurt bourse even before Spohr’s announcement.
Apart from Lufthansa, British budget carrier Easyjet was seen as the other major contender to take over the embattled airline, or parts of the group, which has more than 8 000 employees, 140 aircraft and key airport landing slots.
Spohr told the daily Rheinische Post yesterday that Lufthansa plans to invest
1.5bn in taking over 81 Air Berlin aircraft – about half of the carrier’s fleet – and hiring 3 000 of its employees. Negotiating Easyjet is negotiating with Air Berlin to possibly acquire the remaining 20 to 30 aircraft from the carrier, which last year ran up a loss of about 782 million and has debts totalling nearly 1.2bn.
Air Berlin has already said that it is hopeful that 80 percent of its employees will be able to find new jobs.
Spohr told the Rheinische Post he did not believe Lufthansa’s deal with Air Berlin would result in higher airfares. Instead, he saw ticket prices falling.
“The competition will intensify in both Europe and worldwide,” he told the newspaper. “We are assuming further declines in prices,” he said. Kept flying Air Berlin has kept flying since August as a result of the Ger- man government providing it with a bridging loan of 150m.
However, on Monday, Air Berlin announced that it would end all flight services by October 28.
Flights operated by Air Berlin subsidiaries Niki and LG Walter, which are not insolvent, will continue indefinitely, the company said. – dpa