Over the past 2 days, Lufthansa has been in formal talks with Air Berlin’s leadership regarding the sale of Air Berlin’s assets to LH. Though other bidders are expected to crop up including Ryanair, Thomas Cook and Easyjet, it appears that the battle for Air Berlin may be over before it even begins. While AB is publicly saying that it is possible that more than one suitor may be involved, it appears unlikely that a serious threat would be posed to LH’s chances at this point.
Already with an advantage thanks to the wet lease agreement currently in place for 40 AB aircraft, it looks as though Lufthansa will have little problem in taking over the lease on 90 of Air Berlin’s 140 aircraft, including the ones already under LH’s control.
Lufthansa is in solid win-win position at this point. Not only does it come through as a ‘Champion’ for keeping a German airline German, it will exponentially increase its Eurowings presence in Europe and the rest of world by immediately rebranding the AB birds into Eurowings and expanding their route network.
With German elections looming next month, it is also a fortunate public relations coup for the German gov’t by taking on an active role in bridging a €150 million loan to AB to remain solvent while the details of an LH take over are ironed out. Unlikely that the German gov’t at this point would support a sale of one of their flag carriers to Ireland’s Ryanair or an equally unattractive option in Easyjet, Thomas Cook, or others.