February 2, 2012 / 11:36 AM / 8 years ago

Air Berlin to become full oneworld member in March

FRANKFURT (Reuters) - Air Berlin will join the oneworld alliance of airlines on March 20, Germany’s second-largest airline said on Thursday, allaying concern in the industry an investment deal with Gulf carrier Etihad may have prevented it becoming a full member.

An Air Berlin passenger plane takes off from Tegel airport in Berlin, January 27, 2012. REUTERS/Thomas Peter

While Air Berlin AB1.DE was invited to join the alliance — which includes British Airways (ICAG.L), Cathay Pacific (0293.HK), and Qantas (QAN.AX) — in July 2010, analysts and industry observers have said a deal to sell a stake of almost 30 percent to state-backed Etihad late last year was likely to irritate oneworld.

Etihad is not a member of any of the big passenger airline alliances — oneworld, Skyteam or Star — but is among a band of Gulf carriers muscling in on the highly competitive European market.

Legacy carriers like Lufthansa (LHAG.DE) have been vocal in their criticism of the Gulf carriers’ expansion, with the German flagship airline’s chief executive notably complaining that Emirates was unfairly benefiting from state backing.

Oneworld said the Etihad deal did not complicate the process, highlighting how the carrier already has relationships with airlines in both oneworld and other alliances.

“As far as invitations to other carriers to join oneworld (i.e. including Etihad), we have nothing to announce at this stage,” a oneworld spokesman told Reuters.

By spending 73 million euros to take a 29.2 percent stake in Air Berlin, Etihad became the first Gulf carrier to put cash on the table in Europe to gain scale.

The deal also provided Air Berlin with much needed cash as it strives to cut debt and return to profit.

Air Berlin got approval to join oneworld after a thorough review by sponsor British Airways, it said in a statement.

The German carrier’s shares, which have lost 32 percent over the last year, were up 0.4 percent at 2.36 euros at 1031 GMT.

Reporting by Victoria Bryan; Editing by Jon Loades-Carter

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