German regulator clears airBerlin-Lufthansa deal

Tis Meyer /

A wet-lease agreement planned by airberlin and the Lufthansa Group was approved unconditionally today by the German Federal Cartel Authority (Bundeskartellamt).

Under the wet-lease agreement, airberlin will lease the aircraft to Lufthansa and its subsidiaries Eurowings and Austrian Airlines. Eurowings will take 33 of the aircraft, enabling it to phase out up to 20 older A320s, and Austrian Airlines will take the remaining five. The deal also includes a codeshare between Lufthansa and airberlin equity parent Etihad Airways.

The agreement has a six-year term, which can be extended subject to certain conditions.

airberlin welcomed the regulator’s decision and said the approval was an important milestone in the airline’s restructuring program as it works towards the development of a business model as a focused network carrier with a dual-hub strategy at Berlin and Dusseldorf airports.

Andreas Mundt, President of Bundeskartellamt, said:

“This case raised specific questions. From a competition perspective, the lease of aircraft from a competitor needs to be assessed differently than the takeover of the competitor itself. The agreement between Lufthansa and Air Berlin does not relate to the routes served by the two air carriers. Lufthansa will not take over any of Air Berlin’s slots. Nor will the lease of the aircraft affect the re-allocation of slots that have so far been used by Air Berlin. Naturally, with the additional aircraft Lufthansa will be able to expand its business. However, this potential expansion is not sufficient to justify a prohibition of the agreement.”

The case involved complex legal questions and raised issues that required clarification. To provide answers, the Bundeskartellamt evaluated extensive market data and talked to a large number of market players. Several competitors of Lufthansa submitted comments in which they opposed the wet-lease agreement. The majority of customers and travel agents questioned, on the other hand, did not express any serious competition concerns.

The Bundeskartellamt also held intense talks with the Airport Coordinator Germany. The investigations showed that the wet-lease agreement would not affect the re-allocation of slots that were returned by Air Berlin.

Other aspects of the restructuring process which Air Berlin is currently undergoing (in particular the planned joint venture between TUI, Etihad and Niki) were not the subject of the notification and therefore not part of the Bundeskartellamt’s investigations.

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