Lufthansa in talks to buy most of Air Berlin planes: media

An aircraft operated by German carrier Air Berlin lands in Berlin's Tegel airport, May 3, 2014. REUTERS/Fabrizio Bensch/File Photo

FRANKFURT  – Germany’s Lufthansa (LHAG.DE) is in talks to buy a majority of insolvent Air Berlin’s (AB1.DE) aircraft, with the backing of Berlin, which is pushing for a national aviation champion, media reports said on Thursday.

Air Berlin, Germany’s second-largest airline, filed for bankruptcy protection on Tuesday after shareholder Etihad Airways withdrew funding following years of losses.

The insolvency comes as many Germans enjoy summer holidays, and just ahead of a September general election, both factors which have put pressure on the German government to help minimise travel disruptions and job losses.

Berlin granted a bridging loan of 150 million euros ($175.5 million) to allow the airline to keep its planes in the air for three months and secure the jobs of its 7,200 workers in Germany while buyers for its assets are found.

Air Berlin’s demise offers Lufthansa and rivals a chance to acquire slots at airports such as Berlin Tegel and Duesseldorf, with Germany’s largest airline keen to defend its domestic position against expansion by low-cost rival Ryanair (RYA.I).
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The Sueddeutsche Zeitung newspaper cited company sources as saying that Lufthansa wants to take on as many as 90 of Air Berlin’s roughly 140 planes, including the 38 aircraft that it is already leasing from Germany’s second-biggest carrier and all of the planes in its Niki division.

Lufthansa Chief Executive Carsten Spohr is due to hold talks with Air Berlin’s administrator and its management on Friday, the newspaper said. Lufthansa declined to comment on the report.

Air Berlin CEO Thomas Winkelmann said earlier that the carrier was in talks with three aviation firms and aimed to strike deals with at least two of them by the end of September.

He declined to say in an interview with Frankfurter Allgemeine Zeitung which companies other than Lufthansa were part of the talks, saying only that they were “sufficiently large to offer Air Berlin a secure future and are interested in keeping Germany as a base of operations”.

RedaktionsNetzwerk Deutschland (RND), a group which represents German newspapers, cited government sources as saying that Lufthansa, its budget carrier Eurowings and Condor would likely snap up Air Berlin’s most valuable landing slots.

It said a few slots could also go to Ryanair, which has filed a complaint with German and European Union competition authorities over the insolvency process, which its chief executive describes as a “conspiracy”.

A source has said easyJet (EZJ.L) was also part of the negotiations, and Thomas Cook’s (TCG.L) German airline Condor said it was ready to play “an active role” in restructuring.

German Transport Minister Alexander Dobrindt backed Lufthansa to buy a major portion of Air Berlin’s assets, saying the country needed a “national champion” in international aviation.

“That is why it is urgently necessary that Lufthansa can take over significant parts of Air Berlin,” he told daily Rheinische Post.

Additional reporting by Sabine Wollrab; editing by Robert Birsel and Alexander Smith (Reuters)

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