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BERLIN: Lufthansa has submitted a letter of interest in Air Berlin’s Niki unit and other parts of the insolvent carrier, a source familiar with the talks said on Wednesday.
Air Berlin, which is being kept in the sky thanks to a 150 million euro ($177 million) government loan, has been in talks with interested parties since last week, when it filed for insolvency after major shareholder, Gulf carrier Etihad, said it would no longer provide funding.
Part of Air Berlin’s appeal to bidders lies in its access to take-off and landing slots at airports such as Dusseldorf, in Germany’s most populous region.
As part of a restructuring earlier this year, Air Berlin transferred leisure routes to tourist destinations in Spain and Greece to its Austria-based unit Niki, founded by former F1 driver Niki Lauda.
Analysts at Goodbody said buying Niki would strengthen Lufthansa’s position against Ryanair on such routes.
For 2017, Lufthansa Group, including budget unit Eurowings, has a market share of about 22.4 percent on Germany-Spain routes, against 16.4 percent for Ryanair.
Lufthansa is unlikely to be able to buy all of Air Berlin for competition reasons. Together the two would control around 95 percent of German domestic routes, for example.
Ryanair CEO Michael O’Leary told Reuters on Tuesday he would be interested in a bid for Air Berlin as a whole, but complained Ryanair hadn’t been invited to the process, which he sees as heavily favoring Lufthansa.
German aviation investor Hans Rudolf Woehrl, who wants to buy Air Berlin as a whole, has also criticized the process, saying he was not invited to bid.
Any sale will be decided by a creditor committee, which met for the first time on Wednesday and includes representatives from Air Berlin, the federal labor office which is paying staff wages, Commerzbank, and Eurowings.
— REUTERS