Lufthansa deal to lease Air Berlin planes approved by German watchdog

A flight information board shows cancelled flights during a pilots strike of German airline Lufthansa at Frankfurt airport, Germany, November 30, 2016. REUTERS/Kai Pfaffenbach

BERLIN (Reuters) - The German cartel office on Monday approved plans by Lufthansa LHAG.DE to lease 38 crewed planes from smaller rival Air Berlin AB1.DE, a deal which had drawn criticism from rival Ryanair RYA.I.

The deal, agreed last year, brings a much needed financial lifeline to loss-making Air Berlin, which is part-owned by Abu Dhabi-based Etihad Airways, and allows Lufthansa to quickly expand its Eurowings budget unit.

Ryanair had raised objections to the deal, with CEO Michael O’Leary telling Reuters it was a “fig leaf” to mask Lufthansa’s acquisition of its main domestic competitor.

The cartel office said on Monday that the wet lease deal had to be viewed differently to a takeover and that Lufthansa was only taking on planes, but not slots.

“Lufthansa has the chance to expand with these planes but that growth is not enough to block the deal,” Andreas Mundt, head of the cartel office, said in a statement.

Reporting by Victoria Bryan; Editing by Arno Schuetze