Lufthansa buys up most of Air Berlin

Plans to in­vest 1.5 bil­lion

The Star Late Edition - - BUSINE SSREPORT - Andrew McCathie

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

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