Germany says Air Berlin requires swift deal as prospects look bad

Air Berlin needs a swift deal with carriers interested in buying all or part of the insolvent German airline because its prospects look bad, German Economy Minister Brigitte Zypries said. Zypries said she was surprised by criticism of the German government’s Euros 150mn bridging loan to keep Air Berlin flying, telling a news conference she expects the money to be repaid. We hope it goes quickly, as I believe the future prospects are indeed bad, I mean, who is booking Air Berlin at the moment, even if it’s possible? Zypries said in Berlin yesterday. She said the government had created good conditions for talks on the airline’s future and that there were enough interested parties, including Lufthansa, EasyJet, Ryanair and German aviation entrepreneur Hans Rudolf Woehrl. Air Berlin filed for insolvency on August 15 when main shareholder Etihad Airways withdrew financial support. Ryanair Holdings last week said it’s genuinely interested in bidding for Air Berlin and called on the German company to involve it in the sale process. Ryanair could buy all or part of Air Berlin but has so far been ignored by the ailing carrier, according to chief executive officer Michael O’Leary, who said Wednesday he’s concerned the company will be handed to Deutsche Lufthansa in an anti-competitive, all-German deal. While Ryanair has generally eschewed takeovers and pursued market share through organic growth and cut-price fares, an exception could be made for Air Berlin given its strong position in Europe’s largest economy, O’Leary said. He didn’t comment on whether Ryanair has any interest in its long-haul routes. There are not that many carriers with 25% of the German market that have come up for sale, O’Leary said in an interview. There are lots of other airlines that would be interested in Air Berlin if this was an arms-length, transparent bankruptcy. But it’s very far from that. O’Leary said he’s concerned that politicians are seeking to rush through a deal with Lufthansa, where Air Berlin CEO Thomas Winkelmann worked for 18 years, before Germany’s general election and queried whether the company needs a 150 million-euro loan at the height of the profitable summer season. The handling of Air Berlin’s insolvency contrasts with the bankruptcy of Alitalia, where everyone is able to make a binding offer, O’Leary said. What’s happening in Germany is the absolute opposite. The CEO said he’s sceptical about reports that Air Berlin’s data room has been opened to 10 airlines since it indicated in May that it needed a partner, and that Ryanair hasn’t been granted access. German airline entrepreneur Hans Rudolf Woehrl said on Wednesday that until today, Air Berlin hadn’t responded to an expression of interest from his Intro Aviation, or provided data access. Lufthansa CEO Carsten Spohr said last week he’s ready to take large numbers of Air Berlin employees, though on revised contracts. An outright merger would lift his company’s market share to 95 percent from 68 percent on domestic routes and to 60% from 47% overall, according to Ryanair. Lufthansa has said it’s interested in about half of Air Berlin’s operations.

Source: Civil Aviation Authority, Qatar

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