Lufthansa Prepares to Buy Parts of Air Berlin in $1.8 Billion Deal

According to The Telegraph bankrupt airline carrier Air Berlin will end service on all its routes no later than October 28

According to The Telegraph bankrupt airline carrier Air Berlin will end service on all its routes no later than October 28

Lufthansa will sign an agreement Thursday to buy a large part of smaller, insolvent German air carrier rival Air Berlin, said Lufthansa CEO Carsten Spohr.

A person who is familiar with the ongoing situation said Wednesday that Lufthansa, the largest airline in Germany, was going to acquire the Niki, the Austrian leisure travel line of Air Berlin, its regional airline LG Walter, and also some other aircraft that were short-haul.

He said he decided not to submit a bid as it was a "conspiracy" between the German government, Lufthansa, and Air Berlin that would drive up prices for customers. "But we can only really breathe again when the EU Commission approves the deal", Air Berlin Chief Executive Thomas Winkelmann said.

Andreas Mundt, head of the German cartel office, said the Commission would take a close look at the deal and that the German authorities would follow the process closely.

Air Berlin said late last month that negotiations with Lufthansa and easyJet would continue until October 12.

EasyJet declined to comment on the progress of talks on Thursday.

"Today will be a milestone in the history of Lufthansa and Air Berlin", said Spohr in Berlin ahead of the expected official announcement that a formal deal has been agreed between the airlines. It made a loss of about 782 million euros a year ago.

Italy's national airline Alitalia is in administration and seeking investors too, British leisure airline Monarch collapsed at the start of this month. Spohr said that adding 81 planes to the Lufthansa fleet was the maximum that competition watchdogs would accept.

Lufthansa shares were up over 2.9%, which was the highest mover on the DAX market index in Germany in Thursday morning trading. He expects the deal to get European Union approval by the end of the year.

While it conducted the negotiations, Air Berlin's planes were kept in the air by a government loan of 150 million euros.

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