Lufthansa Said to Offer Condor, TUI Slots to Gain Air Berlin

(Bloomberg) -- Deutsche Lufthansa AG is ready to transfer landing rights from Air Berlin Plc to leisure giants Thomas Cook Group Plc and TUI AG in an effort to fend off antitrust concerns about its bid for most of the insolvent carrier, people familiar with the plan said.

Lufthansa is proposing that takeoff and landing slots from Air Berlin’s Niki division be handed to TUIfly and Thomas Cook’s German arm Condor as part of a package of remedies to be lodged with the European Commission, according to the people, who asked not to be named as the details are private.

The regulator must decide by Dec. 21 whether to approve the acquisition or order a second-stage investigation. Antitrust Commissioner Margrethe Vestager has said the deal could hurt competition on a number of routes, while Lufthansa says that keeping Niki afloat is costing it 10 million euros ($12 million) a week and that an extended review may prompt it to pull the plug.

TUI Chief Executive Officer Fritz Joussen said Wednesday that a deal to lease seven Boeing Co. 737 planes previously used by Niki to Lufthansa’s discount unit Eurowings will stand regardless of whether the wider deal wins antitrust clearance. A further seven 737s will return to TUI from Niki and be deployed at TUIfly during summer 2018 itself.

Joussen, speaking on a TUI earnings call, declined to comment on a potential slots deal. Lufthansa, Condor and the EU also declined to comment when contacted by Bloomberg.

Niki offers flights from Vienna and Dusseldorf to mainly Mediterranean locations with a fleet of about 20 Airbus SE A321 aircraft which are part of the Lufthansa bid.

Lufthansa in October said it planned to acquire 81 Air Berlin aircraft, including the Niki planes and 20 turboprops from regional arm LGW, with the Niki element of the deal accounting for the bulk of its 210 million-euro valuation.

U.K. discount carrier EasyJet Plc separately won commission approval to take over other Air Berlin assets, including slots at the German capital’s Tegel airport, the European Commission said Tuesday, adding that the deal “will not reduce competition.”

Air Berlin said in a statement that Lufthansa is the sole bidder for remaining assets, and that blocking the deal would risk a final grounding that would trigger 1,000 jobs losses and strand tens of thousands of passengers. Those flights operate only with the backing of Lufthansa and a government loan.

©2017 Bloomberg L.P.

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