Last call for bidders on bankrupt Air Berlin | Business| Economy and finance news from a German perspective | DW | 15.09.2017
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Business

Last call for bidders on bankrupt Air Berlin

The German airline has faced its moment of truth as a fierce bidding war has basically closed. Wildcat strikes by pilots had complicated talks on the break-up of the carrier that filed for bankcruptcy protection.

On the radar of potential buyers were some 8,500 employees, 140 aircraft and a string of precious take-off and landing slots at German airports. They had until 12:00 GMT to submit offers, with "concrete decisions" expected from management no later than September 25.

Lufthansa is seen in pole position to acquire large parts of Air Berlin, which will be broken up after German Economy Minister Brigitte Zypries declared that no single company would be able to by the airline "for competition reason." Lufthansa, the German flagship carrier, already leases 38 aircraft from Air Berlin, and could be interested in up to 90, according to media reports.

Air Berlin carried 36 million passengers in 2016 but has long struggled for survival, booking losses amounting to 1.2 billion euros ($1.4 billion) over the past two years. After main shareholder Etihad Airways withdrew its financial support in mid-August, the airline triggered bankruptcy proceedings and gave potential buyers a month to submit offers for its assets.

Accusations flying as bidding heats up

Competitors in the bidding have accused Lufthansa of seeking a monopoly over the German skies with the help of German state authorities. Most outspoken in this was Michael O'Leary, the chief executive of Ireland's low-cost carrier Ryanair, who called a stormy Berlin press conference to denounce a German "stitch-up" in favor of Lufthansa.

As Ryanair announced it would not join in the bidding, a number of other investors have stepped up to the plate including former Formula One racing champion Niki Lauda. On Wednesday, he announced a bid with Thomas Cook to buy 38 Air Berlin planes, along with those belonging to the airline's low-cost subsidiary that bears his first name.

Read more: Fall of Air Berlin needed for further consolidation

Meanwhile, Bavarian aviation investor Hans Rudolf Woehrl has already published a 500-million-euro offer to buy Air Berlin as a whole and invited his rivals to team up with him on the offer. In addition, Jonathan Pang, the Chinese owner of Parchim cargo airport in northeast Germany, and Utz Claassen, the former head of German power supplier EnBW are also said to be weighing a bid, although analysts give all three of them only slim chances in the race.

EasyJet and tourism operator TUI complete the list of prospective suitors with whom Air Berlin CEO Thomas Winkelmann has held talks recently.

Pilots step into the fray

Carve-up negotiations were further complicated by a wildcat strike at Air Berlin this week, in which more than 200 pilots suddenly called in sick grounding some 300 flights and leaving more than 10,000 passengers stranded.

Germany's services sector union Verdi expressed solidarity with the protest action, saying the talks only focused on economic interests and ignored the future of the airline's employees.

But Air Berlin CEO Winkelmann said the pilots were "playing with fire" with their protest, which had cost the company "several million euros."

The insolvent airline Air Berlin announced it was scrapping more long-haul flights to reduce costs while it seeks investors. The routes to destinations in places such as Mexico, Cuba, the Dominican Republic and the Antilles would end from September 25, the carrier said Monday. Last week, Air Berlin already said it was dropping flights from Berlin to New York and Miami, and from Dusseldorf to Orlando as of September 25.

Air Berlin flights are only kept in the air thanks to an emergency loan from the German government to the tune of 150 million euros. The funding, expected to last for three months, is intended to avoid a situation where millions of German holidaymakers end up being stranded abroad.

uhe/tr (AFP, dpa, Reuters)

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