Lufthansa Drops Plan to Buy Air Berlin’s Niki UnitBy
Austrian carrier ceases flights as Lufthansa takeover fails
Administrator says assets once again available for sale
Europe’s biggest discount airline will seek the slots as Niki grounds its planes in the wake of Lufthansa’s decision, spokesman Robin Kiely said Thursday in response to questions from Bloomberg.
Niki has stopped flying “for the time being,” it said in a statement after becoming the latest part of Air Berlin to file for insolvency. The move stranded thousands of travelers and will disrupt plans for hundreds of thousands more, while creating an opportunity for rivals including Ryanair, which shunned the original bid process after saying it would be loaded in favor of Lufthansa.
Air Berlin’s administrators confirmed that it will now stage a “fire sale” process to get the most money from Niki. Thomas Cook Group Plc, which lost out in the initial auction, is still interested as it mulls options for expansion in the German market, a spokesman for the holiday company said.
Niki’s value lies in its landing rights, which may now be sold separately rather than as part of the wider airline operation, making a purchase less risky for investors, administrator Lucas Floether said in a statement.
EasyJet Plc has already won European Union antitrust clearance to buy some Air Berlin aircraft serving the German capital. While Lufthansa dropped its bid for Niki, which has about 20 jets, amid pushback from the regulator, it’s still seeking approval to acquire regional carrier LGW, with about the same amount of turboprop planes.
The EU said it’s still reviewing that proposal ahead of a Dec. 21 deadline for deciding whether to order an extended probe. Lufthansa can also expect to win a significant number of slots via the usual distribution process.
Airlines including Lufthansa, TUIfly and Thomas Cook’s German Condor unit have meanwhile offered 50 percent fare reductions to stranded Niki passengers. People prepared to wait at the airport for a seat will also be brought home for free, Condor said, though those who traveled on package tours may be covered by an industry repatriation plan, and others with full travel insurance will get any extra costs refunded.
Austria will also charter planes to bring passengers back to the country if necessary, a spokesman for acting transport minister Joerg Leichtfried said.
Niki, founded by Formula One racing champion Niki Lauda, had been kept going through a combination of as much as 10 million euros ($12 million) in weekly support from Lufthansa and a 150 million-euro government loan granted to Air Berlin in August to prevent a wholesale grounding of flights.
Lufthansa scrapped its bid on Wednesday after European Union antitrust officials raised concerns about the likely impact of the deal on competition, and indicated that proposed slot surrenders were insufficient. Lufthansa was seeking to acquire 81 Air Berlin aircraft, including about 20 planes from Niki, which was acquired by Air Berlin in stages between 2004 and 2010 and has almost 1,000 employees.
The grounding adds to air-travel disruption across Europe in the run up to Christmas after Air Berlin ceased its own flights in October, weeks after U.K.-based Monarch Airlines Ltd. also folded. Ryanair was forced to cancel 20,000 flights when a crew-rostering issue left it short of pilots, and now faces a succession of strikes at several European bases as staff push for unionization.
— With assistance by Birgit Jennen, Aoife White, and Boris Groendahl