Easyjet deal to take over Air Berlin cleared for take-off

● Analyst deems £35m deal positive strategic decision

Easyjet has confirmed the acquisition of part of liquidated German carrier Air Berlin in a deal worth €40 million (£35.2m).

The transaction will see the budget airline taking control of Air Berlin’s operations at the capital’s Tegel Airport, with Easyjet leasing 25 of its aircraft.

The agreement also includes the Luton-based airline taking over landing slots and offering employment to the defunct carrier’s flying crew.

Easyjet’s new chief executive Johan Lundgren commented: “This move is consistent with Easyjet’s strategy of purposeful investment in strong number one positions in Europe’s leading airports.

“As a result of our acquisition, Easyjet will operate the leading short-haul network at Tegel, connecting passengers to and from destinations across Germany and the rest of Europe. This is in addition to Easyjet’s existing base at Berlin Schonefeld and means [we] will be the leading airline to and from Berlin.”

It comes after the European Commission last week gave the deal the all-clear.

EU authorities said it would not affect airline competition across the bloc where it faces rival carriers including Lufthansa and Ryanair.

Regulators were originally concerned that Easyjet’s expanded landing-slot portfolio at congested transport hubs like Tegel would result in higher barriers to entry for airlines looking to operate from those airports, which could subsequently result in higher fares for passengers.

However, the investigation deemedtheacquisition,which was agreed in October, unlikely to have a negative effect.

Competition commissioner Margrethe Vestager said: “Our decision enables Easyjet to grow its presence at Berlin airports and start competing on new routes to the benefit of consumers.”

Air Berlin declared bankruptcy in August after its biggest shareholder, the Gulf airline Etihad, withdrew financial support for the loss-making firm.

Analyst Jasper Lawler, head of research at LCG, was positive on the takeover, stating: “European airline passenger numbers are expected to grow as Europe’s economy continues to grow, so Easyjet are doing the right thing to expand.

“Expansion in Berlin offers Easyjet both the safety of Germany’s large economy and diversification away from the UK, where a weak pound is a headwind to passenger numbers in 2018.” Canadian coffee chain Tim Hortons is continuing to expand its footprint in Scotland with a new restaurant opening at East Kilbride Shopping Centre this Saturday, and more locations across the UK to be revealed in coming months. Kevin Hydes, chief finance and commercial officer of the Tim Hortons franchise in the UK, said the business is “excited” to open what will be its sixth branch in Scotland. Its UK debut came in June when it opened on Glasgow’s Argyle Street.