December 6, 2017 / 6:55 PM / a year ago

Lufthansa to gain more slots despite offer to give up most Niki slots: source

BRUSSELS (Reuters) - Lufthansa (LHAG.DE) stands to gain a substantial number of airport slots despite offering to give up some take-off and landing slots to win EU approval to buy Air Berlin AB1.DE assets, a person familiar with the matter said, indicating it may have to offer more concessions to satisfy Brussels.

A Lufthansa airliner parks next to the Air Berlin aircraft at Tegel airport in Berlin, Germany, October 12, 2017. REUTERS/Hannibal Hanschke

Lufthansa Chief Executive Carsten Spohr, who wants to expand budget arm Eurowings by buying parts of insolvent Air Berlin, broached the idea on Monday that Lufthansa could give up a large portion of Air Berlin subsidiary Niki’s slots to secure EU approval for the deal.

But the limited practical impact of the offer suggests that the German airline will have to ramp up its concessions if it wants to secure EU approval or face an in-depth, four-month investigation that may lead to a veto.

The European Commission on Wednesday sought feedback from rivals and other interested parties to concessions offered by the German carrier last week.

Lufthansa’s dominant position and slot allocation rules mean the company would eventually acquire Niki’s slots, the person said.

“Under the (EU) Slot Regulation and due to the position of Lufthansa at these airports, Lufthansa would still end up with about 50 percent of these slots,” said the person, who declined to be named because of the sensitivity of the matter.

These would include all Niki slots at congested German airports such as Munich and Berlin Tegel.

Lufthansa’s portfolio of slots would also expand with its proposed buy of the other Air Berlin unit LGW, which includes peak-time slots in Duesseldorf, the person said. Both LGW and Niki fly to Duesseldorf, a popular business and industrial destination.

Lufthansa would also gain Air Berlin’s numerous popular holiday destinations if the deal was approved, the person said.

The airline said it had made a sizeable offer to the Commission.

“We have put forward a package which contains substantial concessions. We have agreed with the Commission to keep the exact concessions confidential,” a Lufthansa spokesman said.

Reporting by Foo Yun Chee, additional reporting by Victoria Bryan in Frankfurt; Editing by Adrian Croft

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