Published: Thu, December 14, 2017
Markets | By Erika Turner

European Union concerns over Air Berlin bid

European Union concerns over Air Berlin bid

The 40 million euro (£35.2 million) deal, which includes some of Air Berlin's operations at Tegel airport, leases for up to 25 A320 aircraft and the taking on of about 1,000 of Air Berlin's pilots and cabin crew, will make easyJet the largest carrier in the German capital.

The Austrian transport ministry said it would repatriate any Niki passengers stranded overseas by cancelled flights.

The government said it expected only part of the loan could now be repaid and it would take steps to minimise losses for taxpayers.

Austrian leisure carrier Niki has filed to open insolvency proceedings and grounded flights after Lufthansa was forced to drop its acquisition of the carrier from insolvent parent Air Berlin amid European competition concerns. This is especially hard for the employees.

It said that several airlines "are now looking into solutions for bringing back passengers on standby-basis for a small fee from overseas destinations back to Germany, Austria and Switzerland".

Lufthansa was ready to transfer some of Niki's landing rights to leisure-travel operators Thomas Cook Group and TUI to satisfy European Union regulators, people familiar with the plans said on Tuesday.

Niki Lauda said he was interested in buying the airline back.

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The European Commission "has clearly indicated that an acquisition of Niki and its integration into the Eurowings group would now not be approved", even with previous concessions on takeoff and landing times, Lufthansa said.

Aside from Lufthansa, Niki attracted bids from International Airlines Group (IAG) and Thomas Cook.

In the wake of the failed Niki pursuit, Lufthansa is offering to relinquish "numerous slots" to gain clearance for the purchase of Air Berlin turboprop operator LGW, officially known as Luftfahrtgesellschaft Walter.

Air Berlin said separately that it's still looking at alternatives for the unit.

"The German government said that it "regrets... very much" the commission's decision on Niki".

Noting that Lufthansa still plans to complete the purchase of LGW, Air Berlin says the purchase price of approximately €18 million will be subject to adjustments upon closing of the transaction and "must be used essentially for a repayment of the priority loan granted by KfW".

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