Air Berlin races to clinch deal with Lufthansa, easyJet

BERLIN (Reuters) - Insolvent German airline Air Berlin AB1.DE hopes to conclude talks with Lufthansa LHAG.DE and easyJet EZJ.L on a carve-up of its assets by the middle of next month as it races to secure jobs and keep flying.

Air Berlin, which has around 8,000 employees, filed for insolvency in August after major shareholder Etihad said it would stop providing funding.

The German government stepped in with a 150 million euro ($178 million) loan, due to last until the end of October, to prevent the airline being grounded so that talks could be held on selling its assets.

Lufthansa has bid for units including leisure airline Niki and regional carrier LGW plus around 13 A320 jets, while easyJet EZJ.L has bid for 27-30 planes, Air Berlin administrator Frank Kebekus said on Monday. Talks will run until Oct 12.

Those two bids, beating out rivals such as British Airways parent IAG ICAG.L, Thomas Cook's TCG.L Condor and other investors, offered the best prospects financially and in terms of securing jobs for Air Berlin's 8,000 staff, he said.

Lufthansa has said it will need 3,000 new employees to grow as a result of the gap left by the Air Berlin insolvency.

Its budget unit Eurowings on Monday extended a recruitment drive, saying it now had over 1,000 open positions, including for 300 pilots, 500 cabin crew and more than 200 ground staff jobs.

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EasyJet’s offer also involves crews and slots associated with the 27-30 planes, including a large share of Air Berlin’s slots and crews at Berlin Tegel airport, Air Berlin CEO Thomas Winkelmann said. EasyJet currently flies from Schoenefeld airport in Berlin.

A source has said Lufthansa’s bid is for around 200 million euros ($237 million), plus a further 100 million to meet operating costs during a transition phase.

Air Berlin said the parties had agreed not to disclose financial details but that the bidders had put forward proposals on financing the winter flight plan from the end of October. It hopes the EU will approve the carve-up by the end of the year.

Lufthansa shares hit 23.485 euros on Monday, their highest level since early 2001, on hopes it would pick up some of Air Berlin’s most attractive assets and strengthen its position in Germany.

Speaking as union Verdi staged a demonstration outside, blowing whistles and waving placards, Winkelmann said Air Berlin was “fighting for every job.”

Administrator Frank Kebekus said flight operations had to be kept stable to bring talks to a successful conclusion, repeating comments made after the airline’s operations were hit by a wave of sickness-related absences among pilots this month.

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However, Air Berlin said Monday it was halting long-haul flights from Oct 15 after lessors recalled planes. It is also stopping flights from Munich to Hamburg and Cologne/Bonn from Sept. 29 and said more would follow.

Reporting by Victoria Bryan and Klaus Lauer; Editing by Keith Weir