Lufthansa Moves for Alitalia and airberlin

Lufthansa Group could be set to expand its business significantly after submitting a proposal to acquire elements of ailing Alitalia.  A statement from the German flag carrier issued on October 16 confirmed it was not bidding for the complete airline, but “…only parts of the global network traffic and European and domestic point-to-point business.”  The offer also includes a concept for a newly structured Alitalia – dubbed NewAlitalia – “with a focused business model which could develop long-term economic prospects.”

The cost of the mooted acquisiton remains confidential, though Italian newspaper Corriere della Sera reported Lufthansa is eyeing a €500m investment in the Italian flag carrier.  Alitalia entered the Italian equivalent of Chapter 11 bankruptcy proceedings in May after staff reject a deal enabling a fresh injection of funds from shareholders.  Interested parties had until October 16 to make binding offers.

Lufthansa’s NewAlitalia proposal came just days after it signed a €210m ($249m) contract to buy large parts of airberlin, including its Austrian arm, Niki, and regional carrier LGW.  The deal, confirmed on October 12, sees the German flag carrier take on 870 LGW employees as well as the airline’s 17 Bombardier Dash 8-Q400 turboprops and 13 Airbus A320s.  It will also offer employment to 830 of Niki’s staff and take 20 of the carrier’s A320 Family jets, putting Lufthansa in full control of the wet-lease operation airberlin had previously been providing for german flag carrier’s low-cost offshoot Eurowings.

“This contract provides new opportunities for jobs for a large part of our workforce.  But we can only really breathe again when the EU Commission approves the deal,” Air Berlin Chief Executive Thomas Winkelmann was quoted by Reuters as saying.

Lufthansa CEO Carsten Spohr said he expects the European Union to approve the deal by the end of the year, though rivals, including Irish low-cost carrier Ryanair, have threatened to refer the acquisition to the EU competition authority.