Lufthansa drops plan to buy Air Berlin's Niki as European Union digs in

Air Berlin had already warned that Lufthansa's was the only "viable" bid for Niki and that the carrier would have to file for bankruptcy if the European Commission failed to clear the acquisition before 21 December.

The European Commission "has clearly indicated that an acquisition of Niki and its integration into the Eurowings group would now not be approved", even with previous concessions on takeoff and landing times, Lufthansa said. It will instead focus on submitting revised concessions to the Commission with a view to completing its acquisition of another Air Berlin unit, LGW.

The administrators said on Tuesday British Airways' parent IAG was no longer interested and talks with Thomas Cook had not yet resulted in a viable deal. The Commission said it would now limit its review to LGW.

The decision came after the European Commission said last week that it had "deep competition concerns" about the Frankfurt-based carrier's plan to buy of 81 aircraft from Air Berlin's 140-plane fleet plus Niki for 210 million euros ($250 million).

Shares in Easyjet were down 0.1% at 1,438.00 pence Tuesday.

Lufthansa said on Wednesday it still meant to pursue growth plans for its Eurowings budget subsidiary and would apply for any Niki slots that become free in the event of an insolvency.

Lufthansa had said it would now stop financing the airline, which it had been keeping afloat with about 10 million euros a week since August, Bloomberg News reported.

Niki Lauda said he was interested in buying the airline back.

Its aircraft were kept aloft, until being grounded in October, by an emergency loan of 150 million euro ($175 million) from the German government while it negotiated the sale of its assets.

"Due to the unexpected loss of proceeds from the Niki sale, KfW's loan to Air Berlin guaranteed by the federal government may only be partially repaid", it adds.

Easyjet proposed to acquire certain assets and rights held by Air Berlin as part of its previous operations at Berlin Tegel airport, including landing and take-off permission at a specific date and time at Tegel airport and at some destination airports, according to an EU?statement. That would leave the German government almost 100 million euros short.

  • Eleanor Harrison