German aviation market

Thomas Cook buys Air Berlin unit as airlines eye growth chances

Leisure airlines Condor, Eurowings, Easyjet, Vueling, TUIfly, SunExpress and Germania all aim to profit this year from the insolvencies of Air Berlin and Niki through a mix of acquisitions, fleet expansion and new routes – while even LTU could be resurrected one decade after disappearing from the market.

January 04, 2018
Condor chief Ralf Teckentrup has snapped up an Air Berlin unit to help expand capacity.
Photo: Holger Peters Fotografie

The break-up of the insolvent Air Berlin Group over the last few months has resulted in the biggest transformation of the German aviation market for years. Its fleet has effectively been split up between various airlines, who are now working on growth strategies for the rest of winter 2017/18 and the forthcoming summer 2018 season.

Thomas Cook Airlines/Condor could be poised to create a new airline unit as part of plans to increase German air capacity by 20% this summer. The group yesterday made a surprise move by acquiring ‘Air Berlin Aviation’ (formerly ‘Air Berlin Aeronautics’) for a low single-digit million euro sum. This holding company does not have any planes, crew or slots but was created several months ago to apply for an airline operating certificate (AOC).

However, the tourism group last week signed lease contracts for six A321s that were formerly operated by Air Berlin and is currently seeking pilots and cabin crew for them. Cook could then allocate these planes to ‘Air Berlin Aviation’ and apply for airport slots on the basis of its licence. This new unit could operate on a similar basis to ‘Condor Berlin’, a former airline subsidiary based in Berlin that flew A320s on a lower cost basis.

A Thomas Cook spokesman said: “The Air Berlin assets give Condor the option to grow, especially as demand has increased strongly in the German market in the last few months.”

Condor has already launched extra flights this winter with seven leased planes, offering total capacity of 68,000 extra seats, to bring former Niki tour operator passengers to and back from their destinations this winter. These jets are flying from several German airports (Cologne/Bonn, Düsseldorf and Munich), Vienna and Zürich to the Canary Islands as well as from Cologne/Bonn, Düsseldorf, Frankfurt and Munich to Palma.

Overall, Thomas Cook wants to have 20% more air capacity in the German market for summer 2018. To achieve this, the group plans to use the newly-founded Thomas Cook Airlines Balearics subsidiary (with initially 3 A320s) on various German routes, additional leased planes, and now the new unit based on Air Berlin Aviation.

The two main “winners” of the Air Berlin/Niki break-up, who successfully bid for parts of the former German number two airline, are moving fast. British low-cost carrier Easyjet is gearing up to launch flights from Berlin-Tegel on Friday (January 5) following approval to take over 25 former Air Berlin planes, and associated slots. The British low-cost airline will become the market leader in Berlin, flying domestic and European city routes. Vueling, the IAG low-cost subsidiary, is likely to expand at various German airports in the summer with the takeover of Niki, including 15 A320s (see separate article).

Meanwhile, Lufthansa is pressing ahead with plans to expand Eurowings’ fleet despite failing to take over Niki. The German market leader will provide its budget subsidiary with 30 more A320 planes ready for the summer 2018 schedule, thus effectively more than making up for the “missing” Niki planes. In addition, it will integrate former Air Berlin unit LGW, with 33 planes (20 turboprops and 13 A320s), into Eurowings following the European Commission’s approval for that transaction. The Eurowings fleet will thus grow to 133 planes this year.

Eurowings managing director Oliver Wagner told fvw: “Nothing has changed with our growth target of 210 planes. We will now simply slightly adjust the speed of our growth and expand more organically.”

TUIfly will increase its fleet by four planes this summer following a new agreement with unions that will reduce operating costs by €30 million. CEO Roland Keppler said TUIfly will re-integrate seven of the 14 jets formerly wet-leased to Air Berlin in two stages, increasing its fleet from 25 jets this year to 29 next year and 32 in 2019. The other seven planes will be operated under wet-lease for Eurowings from the start of 2018 onwards.

Among other carriers, SunExpress, the German-Turkish airline 50% owned by Lufthansa, will increase flights from Germany, Austria and Switzerland to Turkey (Antalya, Izmir) as well as to Greece (Crete) and Bulgaria (Varna, Burgas) this summer. Similarly, niche specialist Germania, which already flies to Antalya and Bodrum, will add flights from Berlin to five more destinations in Turkey this summer.

According to media reports, one surprising consequence of the collapse of the Air Berlin Group could even be the return of LTU, the well-known German leisure airline that was sold to Air Berlin in 2007. Its famous red-and-white striped planes disappeared from the skies as the fleet was integrated into that of Air Berlin over the following few years.

But the Rheinische Post regional newspaper has reported that three former Air Berlin employees have registered two firms under the name ‘LTYou’ in Germany and in the USA. They are apparently considering long-haul flights between the two countries. However, the plans appear to be at a very early stage and a revival of LTU seems very unlikely, according to observers.

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