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Lufthansa – Air Berlin Deal Raises Concerns

© Lufthansa AG/Hady Khandani

© Lufthansa AG/Hady Khandani

Lufthansa was set to officially confirm that it had sealed the deal for the purchase of large parts of insolvent airline Air Berlin on Thursday, raising in the meantime concerns by the International Airlines Group (IAG).

The agreement, which has been expected for weeks and described by Lufthansa CEO Carsten Spohr as “a milestone”, appears now to be running into “competition issues”.

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According to Reuters, IAG, one of the world’s largest airline groups, sees significant competition issues with the deal. “We did make a bid for Air Berlin, but our view was that Lufthansa was always going to get it,” IAG CEO Willie Walsh said on the sidelines of the CAPA global summit in London on Friday.

“We will watch carefully because we think there are significant competition issues,” he said, adding that it was unclear to him what was happening with easyJet, which is also in talks for Air Berlin assets, but has not yet agreed a deal, Reuters reported.

At the same time, trade unions have also expressed concerns over the deal. Dpa reported on Friday that a Verdi spokesman had called on Lufthansa to quickly negotiate bargaining with the union.

According to Spohr, Lufthansa was set to purchase 81 of Air Berlin’s 144 planes and keep some 3,000 of the company’s employees. He was reported as telling German media that Lufthansa was aiming to invest up to 1.5 billion euros into the failing carrier as part of the assets takeover.

According to reports, Irish low-cost carrier Ryanair has also said it would take the Lufthansa deal to European competition authorities.

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