Lufthansa makes big concessions to Brussels

Lufthansa is offering wide-ranging concessions to the European Commission in order to gain rapid approval for its takeover of leisure airline Niki.

December 07, 2017
Lufthansa is offering to give up Niki slots.
Photo: NIKI

The German market leader is apparently ready to go a long way to secure regulatory approval of its €210 million deal to buy Niki, regional carrier LGW and leased planes with associated slots from Air Berlin. Lufthansa wants to integrate Niki, which flies holiday routes from Germany, into budget subsidiary Eurowings.

The European Commission is due to decide by December 21 whether to approve the deal with conditions, or to proceed to an in-depth phase two investigation which could take at least three more months. Brussels apparently fears that Lufthansa’s “dominant” position on the German aviation market would be further strengthened with the takeover of Niki.

Lufthansa CEO Carsten Spohr held emergency talks with EC officials in Brussels late last week. On Monday he told journalists: “We would practically take over Niki without any slots if the European Commission gives its OK.” This would include no slots at Düsseldorf and only a few at Palma, he said.

But Spohr also outlined a ‘Plan B’, suggesting that if Brussels blocks the takeover, then budget subsidiary Eurowings could expand organically instead.

In the latest move, the Commission is now apparently planning to hold talks with other market participants to gain their assessment of the implications of a Lufthansa takeover of Niki. One issue is that about half of the Niki slots given up by Lufthansa could actually return to the airline under rules governing redistribution of available slots to existing and free carriers.

If the Lufthansa takeover is blocked, then the future of Niki remains open. At present the airline is effectively being financed by Lufthansa which has bought up most of its winter season capacity to provide a sufficient cash-flow.

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.

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