German aviation market

Will Lufthansa get Niki or not?

The European Commission is considering blocking Lufthansa’s takeover of leisure airline Niki to prevent subsidiary Eurowings from dominating the German holiday flights market.

November 30, 2017
Will Niki land with Lufthansa or not?
Photo: Niki Air

Lufthansa’s apparently smooth flight path towards taking over Air Berlin units Niki and LGW, and thus extending its leadership of the German aviation market looks under threat.

The German airline has agreed to pay €210 million for the takeover of 81 former Air Berlin planes, routes and slots, including Niki and regional airline LGW. Under the takeover strategy, Niki would be integrated into Eurowings, making the Lufthansa subsidiary into the largest German leisure airline and much bigger than rivals Condor and TUIfly.

But German media reported on Wednesday that the European Commission is “leaning towards” prohibiting the takeover of Niki unless Lufthansa makes major concessions in terms of routes and slots.

Brussels apparently fears that Lufthansa’s “dominant” position on the German aviation market would be further strengthened with the takeover of Niki. Moreover, it has noted there were other bidders for the leisure airline, such as Condor/Niki Lauda and British Airways parent IAG, as part of the Air Berlin break-up process.

Lufthansa CEO Carsten Spohr was due to meet EU competition commissioner Margarethe Vestager today (Thursday) to try to hammer out an agreement.

Thomas Cook Airlines chief Christoph Debus told the Frankfurter Allgemeine Zeitung that the Commission should look very closely at the takeover of Niki and should only approve Lufthansa’s overall deal with Air Berlin “after an intensive review and under conditions”.

However, experts warned that a veto of the Lufthansa deal could effectively mean that Niki would quickly be forced to declare insolvency, grounding its fleet and leaving countless tickets worthless. The airline is currently still flying thanks mostly to financial support from Lufthansa which has bought up a large part of its winter capacity to provide a sufficient cash-flow.

Niki’s new Commercial Director, Elisabeth Jesse, told fvw earlier this month that Niki is operating a fleet of 28 jets stationed at 12 different airports on more than 100 routes to Spain, Egypt and Morocco this winter.

But there was a quick reaction to the developments from Niki Lauda who told media in Vienna that he was ready to make a new offer for Niki in cooperation with Thomas Cook if the Commission blocked Lufthansa’s takeover. “We’re ready for talks,” he said.

Meanwhile, earlier this week, it was reported that Condor will fly domestic routes within Germany for Easyjet on a wet-lease basis from January. The British low-cost carrier plans to launch flights from Berlin-Tegel at the start of 2018 using mostly leased planes once it gets European Commission approval for its €40 million deal to take over 25 Air Berlin planes, slots and about 1,000 staff.

Condor will apparently station several planes at Berlin-Tegel to operate domestic flights for Easyjet for about four months. One likely route is Berlin-Frankfurt, where Lufthansa is currently operating a B747 due to heavy demand following Air Berlin’s market exit.

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