Lufthansa To Buy Air Berlin Shares

Lufthansa To Buy Air Berlin Shares

Lufthansa To Buy Air Berlin Shares. Years of struggle for the second German airline Air Berlin appeared in their final stretch Thursday when air giant Lufthansa announced plans to buy more than half of the company's aircraft in bankruptcy.

The agreement sparked controversy in the European aviation industry, and the German government faced accusations that it helped lead the process under a plan to build the Frankfurt-based airline into a giant of all conquests.

Lufthansa will take over the Austrian subsidiary of Air Berlin, Niki from the German subsidiary LGW and 20 additional aircraft, guaranteeing all work at the two smaller firms, Air Berlin said in a statement.

The agreement includes 81 of Air Berlin's 144 aircraft and 3,000 of its 8,500 employees, Lufthansa chief executive Carsten Spohr said in Berlin and called it a "big day" for his company.

Meanwhile, negotiations with Easyjet - the other bidder chosen for exclusive purchase talks - "continue," Air Berlin said, without providing information on what the British firm expects to buy or if Air Berlin staff will keep its jobs.

Spohr has suggested that Easyjet is interested in up to 30 aircraft. Lufthansa has yet to say how much it will pay under the agreement, but Spohr told the Rheinische Post on Thursday that the group will invest € 1.5 billion ($ 1.8 billion) in its low-cost subsidiary Eurowings after the acquisition.

He added that 80 aircraft were the largest addition to the Lufthansa fleet that competition authorities would accept.

"The European Commission will look closely at this and we will support them," Andreas Mundt, director of Germany's federal competition authority, told Twitter. "We can only breathe when the Commission has finally confirmed the transaction," Air Berlin boss Thomas Winkelmann said in the company statement.

Many German domestic routes will only offer in the future an option between Lufthansa and Eurowings. But Spohr told the Handelsblatt daily on Thursday that "we expect competition authorities to examine the acquisition, at least from the point of view of European competition, and not limit it to the German market."

While authorities are investigating, Air Berlin will operate flights as a subcontractor, as insolvency rules prohibit it from flying on its own after 28 October.

Air Berlin triggered bankruptcy proceedings in August after losing a cash lifeline of its largest shareholder, Etihad Airways. Its planes have been held up by an emergency loan of 150 million euros from the German government, while details of the breakup were worked out.

German and international investors and competitors lined up, with their sights set not only on Air Berlin's planes, but also on coveted takeoffs and landing at crowded airports. In the race for exclusive talks, Lufthansa and Easyjet allegedly defeated IAG - owner of Iberia and British Airways - and three offers of between 500 and 600 million euros each from private investors