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Lufthansa offers EU concessions over Air Berlin asset buy
December 1, 2017 / 8:14 AM / 13 days ago

Lufthansa offers EU concessions over Air Berlin asset buy

BRUSSELS (Reuters) - German airline Lufthansa (LHAG.DE) has offered concessions to try to allay competition concerns about its plan to buy Air Berlin assets, EU antitrust regulators said on Friday.

Lufthansa Boeing 747-400 jumbo jet is seen at Tegel airport in Berlin, Germany, November 2, 2017. REUTERS/Axel Schmidt

The European Commission, concerned about Lufthansa’s potential dominance in Germany as a result of the plan, extended its deadline for a decision on the deal to Dec. 21 from Dec. 7. It did not provide details of Lufthansa’s concessions.

A source familiar with the matter told Reuters on Thursday that the airline was willing to cede slots belonging to Air Berlin businesses Niki and LG Walter (LGW).

Air Berlin filed for insolvency in August and was subsequently carved up, with Lufthansa buying Niki and LGW, plus some short-haul planes, for 210 million euros ($249 million) to expand its Eurowings budget brand.

Berlin pledged a 150 million euro loan to prevent Air Berlin’s planes from immediately being grounded. But the deal has come under fire from airlines and consumer groups who fear it will give Lufthansa dominance of German domestic routes and in Austria. Lufthansa was expected to have to offer significant remedies as the Commission determined Lufthansa, Niki and LGW’s activities overlapped on more than 100 routes. On around half of those routes, the combined market share would be above 60 percent, while on some routes Lufthansa would also have a monopoly.

Austria’s government in August said it stood ready to provide bridge loans to keep Niki operating, but the status of that promise is unclear after parliamentary elections in October, which are set to bring a change in government.

The chief of Niki’s workers’ council, Stefan Tankovits, told Oe1 radio on Friday it was hard to tell whether the offer of a government loan still stood.

The Chancellery and the Infrastructure Ministry said the preference was to save jobs but both ministers, hailing from the outgoing Social Democrats, have limited influence on future decisions.

The conservative-controlled Finance Ministry and the Freedom Party, which is likely to enter government with the conservatives, had no immediate comment.

Former motor racing driver Niki Lauda, who founded the Niki business, and Thomas Cook’s airline Condor had offered around 100 million euros to buy Niki plus 17 aircraft. British Airways owner IAG (ICAG.L) had also made a bid for the unit.

Both Thomas Cook and IAG have declined to comment on whether they are still interested in Niki.

Additional reporting by Shadia Nasralla in Vienna and Alistair Smout in London; Editing by Jason Neely and Mark Potter

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