What has been rumored and speculated for the past several weeks is set to become fact and reality.    Lufthansa is poised to take over 40 of Air Berlin’s aircraft at at the same time take over approximately one-third of Air Berlin’s routes.

The decision is expected to be made at the upcoming LH Supervisory Board meeting scheduled for later this month and it is fully expected that the board will rule in favor.    The timing works out well because this will allow Lufthansa to time the ‘take over’ of the routes and aircraft with the beginning of the Winter Timetable that takes effect on October 31.     These flights will operate under LH’s Eurowings LCC division, and no, the aircraft will not be repainted to match EW or LH liveries!

This does not affect Air Berlin’s operations in Dusseldorf or Berlin.   Flights to and from those cities will continue to be operated by Air Berlin.

Why is Lufthansa willing to do this?

Well, it’s basically taking a bullet for Air Berlin and trying to build out Eurowings at the same time.

Air Berlin is bleeding money faster than it can make it, and it’s Mid-Eastern overlord, Etihad, is becoming growingly impatient with operating results after making a substantial investment into AB’s business.   If Air Berlin continues its current path, it faces no option other bankruptcy and being thrown on the pile of other failed European LCC airlines.

Lufthansa almost has no choice but to enter this unholy alliance with Etihad to help save Air Berlin.  Otherwise, should Air Berlin disappear, the vacuum that would be created would suck in competitors such as Ryanair, EasyJet, Norwegian, etc. to fill in the void left by Air Berlin.    Lufthansa is simply playing defense to protect their own market.  As strange and unorthodox as it may appear, it is actually LH’s only choice if it doesn’t want to see even more foreign competitors flying in and out of German airports.    At the same time, Eurowings is not big or successful enough to take on any void left by AB, so Lufthansa needed to step up and help cushion what appears to be the imminent failure of Air Berlin.

Should AB fail, at least Lufthansa is there to catch the pieces and immediately increase the size of Eurowings with the demise of AB.  Lufthansa has said all along that Eurowings would be used to absorb other Euro LCCs should any of them be at risk of failure.   Air Berlin will simply be the first airline to test LH’s experiment.

 


SWISS