Lufthansa acquiring Air Berlin assets to bolster Eurowings

Oct 13, 2017, 00:21
Lufthansa acquiring Air Berlin assets to bolster Eurowings

As part of the deal Lufthansa will take over Air Berlin's low-priced leisure airline Niki, its LG Walter regional airline as well as 20 additional aircraft - bringing the total to around 80 planes.

Lufthansa plans to use the Air Berlin assets to quickly expand its Eurowings budget business.

Air Berlin said late last month that negotiations with Lufthansa and easyJet would continue until October 12.

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).

Analysts in London lifted the target price for shares of Lufthansa to €29 from their previous €25, citing the soon to be signed deal to acquire much of Air Berlin, a new labor deal that was multi-year with its pilots that it announced earlier this week, and a strong trading performance for 2017.

Lufthansa will purchase Air Berlin subsidiary Niki, a low-priced airline based in Austria, as well as Air Berlin's regional subsidiary Walter, which now flies under the Air Berlin brand.

EasyJet, which has a base at Berlin's Schoenefeld airport, has been discussing acquiring 27 to 30 planes.

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.

EasyJet declined to comment on the progress of talks on Thursday.

The group's finance chief Ulrik Svensson had said in August that Lufthansa was interested in helping to shape the Italian aviation market but was not willing to take over the struggling national carrier in its current shape.

Analysts at Bernstein Research raised their rating on Lufthansa's shares to "outperform" from "market-perform", saying they expected a deal with Air Berlin to add around 70 to 90 million euros to annual operating profits at Eurowings in the medium term.

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