Lufthansa’s supervisory board approved plans to invest 1 billion euros ($1.2 billion) in up to 61 additional planes to expand its Eurowings budget business after German rival Air Berlin was declared insolvent, Reuters reported. Air Berlin’s creditors have selected Lufthansa and British budget carrier easyJet to negotiate over a carve-up of its assets. The Lufthansa investment is set to be used for the purchase and lease of 41 A320 single aisle jets and 20 Bombardier Dash 8 Q400 planes, Lufthansa said.
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Germany
Insolvent German airline Air Berlin hopes to conclude talks with Lufthansa and easyJet on a carve-up of its assets by the middle of next month as it races to secure jobs and keep flying, Reuters reported. Air Berlin, which has around 8,000 employees, filed for insolvency in August after major shareholder Etihad said it would stop providing funding. The German government stepped in with a 150 million euro ($178 million) loan, due to last until the end of October, to prevent the airline being grounded so that talks could be held on selling its assets.
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Air Berlin’s Austria-based unit Niki said a court has rejected an insolvency petition brought against it by an Austrian tour operator, adding that its flight operations are continuing, Reuters reported. “The Korneuburg regional court confirmed the legal opinion of Niki and has rejected the insolvency petition as unfounded,” Niki said in a statement on Friday. Parent Air Berlin filed for insolvency in August, but Niki, which flies to tourist destinations from Germany and Austria, was not part of the insolvency proceedings.
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A Lufthansa bid price of 200 million euros ($239 million) to buy assets from insolvent Air Berlin plus 100 million euros to meet operating costs is roughly correct, a source familiar with the talks said on Sunday. The newspaper Bild am Sonntag earlier reported the figures, citing sources close to the proceedings. The newspaper said that there could be three months between signing a purchasing contract and implementing the transaction because German and European competition authorities would need to vet any deal, Reuters reported.
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Lufthansa is set to pick up a large part of insolvent rival Air Berlin, and easyJet is also still in the running for some assets, two sources familiar with the matter said. Air Berlin’s creditors met on Thursday to discuss offers for Germany’s second largest airline and agreed the carve-up, the sources said. Air Berlin, which has about 8,000 employees and operates 144 mostly leased planes, filed for insolvency in August after major shareholder Etihad pulled the plug on funding, Reuters reported.
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Lufthansa budget unit Eurowings has agreed a deal with the Verdi union that will allow it to hire new cabin crew at short notice from rivals such as bankrupt Air Berlin, Reuters reported. Eurowings launched a recruitment drive last month, seeking around 200 pilots and 400 cabin crew qualified to fly and crew A320 jets. Air Berlin also flies A320s and so Eurowings’ move is a chance for staff to get hired without waiting for talks on a carve-up of the carrier to finish.
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Austrian airline Niki said on Wednesday it had paid all bills owed to a tour operator and it therefore expected to avert bankruptcy proceedings which have hit parent Air Berlin, Reuters reported. Law firm Kosch & Partner said earlier it had applied for insolvency proceedings against Niki on behalf of an Austrian tour operator which said it was owed money by Niki. The law firm declined to identify the tour operator. “We have reviewed the relevant post, and the claim has been settled,” Niki said in an email to Reuters.
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Airlines Condor and Eurowings plan to provide flights to the Caribbean from Duesseldorf, meeting demand from Germans seeking winter sunshine after cancellations by insolvent Air Berlin, Reuters reported. Air Berlin filed for bankruptcy protection in August after major shareholder Etihad pulled the plug on funding. It has been forced to scrap long-haul flights from its two bases of Duesseldorf and Berlin after a leasing company asked for its planes to be returned.
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In a related story, tour operator TUI’s airline TUIfly is seeking to cut its costs by at least 30 million euros ($36 million) as it prepares to take back aircraft it has leased out to insolvent Air Berlin’s Austrian unit Niki, a German paper reported. Some 20 million euros of savings are to come from more flexible working hours for its nearly 500 pilots, daily Hannoversche Allgemeine Zeitung said late on Monday, citing company sources, Reuters reported.
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British Airways owner IAG has joined the field of bidders for parts or all of insolvent German airline Air Berlin, two people familiar with the matter told Reuters on Monday. Lufthansa and several other parties had put in bids for parts of Air Berlin by the deadline of Friday set by the insolvency administrator, Reuters reported. Air Berlin is Germany’s second-biggest airline after Lufthansa. It employs more than 8,000 people.
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