by Lufthansa Flyer | Jul 20, 2016 | Air Berlin, Airlines, Corporate, Etihad, Featured, Lufthansa |
In news out of Germany in the last several hours, it appears that Lufthansa is a little bit more than serious about acquiring routes and aircraft from a struggling Air Berlin.
In a potential deal between unlikely bedfellows, Lufthansa is in discussions with AirBerlin’s main stake holder, Etihad, about the prospects of acquiring upwards of 40 aircraft and a majority of routes that are not operated in or out of AB’s hubs in Berlin and Duesseldorf. The acquisition would also include the crews for the aircraft.
Air Berlin currently operates 148 aircraft, so any acquisition would be a major one, since it would cut Air Berlin’s fleet by 27%. But this kind of a deal would also take the sting out of AB’s balance sheet which has hemorrhaged $1.29 BILLION in losses over the last 3 years.
The aircraft and routes would be assigned to Lufthansa’s Eurowings ‘Low Cost Carrier’ division and would immediately grow market share by eliminating the AB competition on the routes. This also plays well in Lufthansa’s plan that seeks to grow Eurowings by 25-30% in the coming year.
The one fly in the ointment will be the anti-trust fears that Germany and the EU will have. Historically, Germany and/or the EU have not looked favorably at deals that potentially reduce competition in the marketplace. But on the other hand, the real threat exists for the loss of thousands of jobs and the failure of an airline.
Not that the EU has made any good decisions lately, but here’s a chance for them to not screw something up! 😉
It would also be a welcomed jab at the ME3 who have been dumping capacity into Europe thanks to their subsidized operations, but I digress…….
by Lufthansa Flyer | Jul 8, 2016 | Corporate, Featured, Lufthansa, Strike |
Finally…..
After months and years of squabbling and strikes, Lufthansa has announced that it has reached a binding long-term agreement with UFO, the union that represents most of Lufthansa’s cabin crew employees.
The new collective bargaining agreement (CBA) is in place until June 30, 2019 with further agreements that guarantee salary increases, employment guarantees, and pension enhancements beyond that date:
Cabin crew will receive a 1% raise on October 1, with an additional 2% raise on January 2018.
A shift in pensions programs from a defined benefit program to a defined contribution program. This reduces fiscal liability to Lufthansa, who will contribute 5.2% of an employees salary annually towards their pension benefit. Employees can still retire at age 55.
A conflict resolution process has been put in place through 2023.
Current cabin crew have employment guarantees through 2021. Lufthansa will not be able to hire non-union cabin crew for Lufthansa Airlines until 2023.
by Lufthansa Flyer | Jun 2, 2016 | Corporate, Featured, Frankfurt, Industry News, Lufthansa |
Apparently Venezuela is not the only country who doesn’t understand how to play well with others……
According to reliable sources within Lufthansa, it appears that Nigeria is another country where LH is having trouble repatriating ticket revenue due to unreasonable currency regulations. In Nigeria’s, $20 million is held captive there and Lufthansa has no way to bring the revenue out of Nigeria.
It may not be as dramatic as the $100+ million held by Venezuela, but it’s certainly a serious amount. So much so, that according to LH, if the number approaches $30 million over the coming months, LH will be forced to suspend operations to their 3 destinations in Nigeria. Currently LH services Lagos, Abuja (as technical stop), and Port Harcourt daily from Frankfurt.
Based on the information that I’ve read, it looks as though the airline industry as a whole has nearly $600 million stuck in Nigeria with no way to bring the money home to their balance sheets.
Related: Lufthansa Cancels Venezuela Service
Lufthansa owed over $100mm by Venezuela
