Lufthansa to buy large parts of bankrupt Air Berlin

Andrew Cummings
October 12, 2017

German airline giant Lufthansa has confirmed it will buy a large portion of its insolvent competitor Air Berlin for around 210 million euros ($249 million).

Air Berlin filed for bankruptcy in August after its main investor Etihad Airways pulled out. He also told the Rheinische Post newspaper that Lufthansa would invest up to 1.5 billion euros into Air Berlin as part of its takeover of the assets.

Its aircraft have been kept aloft by a 150-million-euro ($178 million) emergency loan from the German government.

Shares in Lufthansa were up 2.9 percent at 25.27 euros (22.67 pounds), the top gained in Germany's DAX market index 0#.GDAXI by 0800 GMT after Spohr's comments and upbeat notes from brokerages.

Industry analysts in Europe said they raised ratings on shares of Lufthansa from market-perform to outperform, saying they believe a deal to acquire part of Air Berlin would add between €70 and €90 million in operating profits annually to Eurowings the budget unit of Lufthansa over the medium term. The airline carried some 80,000 people a day mostly on short-haul destinations.

Air Berlin carried an average of 80,000 people a day, but endured losses of an estimated 782 million Euros previous year.

Earlier this week, dpa reported that the airline said in a letter to employees that flights under the airline code AB "according to the current state of things, will no longer be possible after October 28 at the latest".

Lufthansa CEO Spohr said that he expected the imminent deal for Lufthansa with Air Berlin would receive necessary approval from the European Union before the end of 2017.

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