easyJet clinches parts of Air Berlin for German expansion

BERLIN (Reuters) - EasyJet has strengthened its position in Germany by agreeing to buy part of Air Berlin’s operations at Berlin Tegel airport, ending uncertainty over the fate of the failed airline’s remaining assets.

EasyJet Commercial passenger aircraft takes off in Colomiers near Toulouse, France, October 19, 2017. REUTERS/Regis Duvignau

EasyJet said late on Friday it would enter into leases for up to 25 A320 aircraft, acquire take-off and landing slots, and offer jobs to staff, making the announcement shortly after Air Berlin’s final flight landed at Tegel. [nL8N1N21Y9]]

The purchase price is 40 million euros ($46.43 million), but this does not include any transition costs and because Air Berlin planes are leased, those will have to be funded separately.

Air Berlin said on Saturday that the deal meant it had successfully closed all negotiations for its carve-up. It added sale talks with easyJet had been held since the early summer. The British carrier declined to comment on the timeline.

The deal will make easyJet, which currently operates only out of Berlin Schoenefeld airport, the leading carrier in the German capital, it said.

“This will enable easyJet to operate the leading short haul network at Tegel connecting passengers to and from destinations across Germany and the rest of Europe,” easyJet said in a statement.

In comparison, Lufthansa, which is taking on Air Berlin operations with about 81 aircraft, expects to invest around 1.5 billion euros in total. That includes a purchase price of 210 million euros and fleet investments of around 1 billion.

The deal with easyJet, subject to regulatory approval, could help to ease some of the worries with the Lufthansa deal, because it gives Lufthansa a competitor in the domestic German market.

Air Berlin had been the main rival for inner-Germany routes, while others like easyJet and Ryanair had focused on routes to and from Germany.

Air Berlin was founded nearly 40 years ago and carried around 30 million passengers a year. It was beloved by Germans for its flights to holiday island Mallorca and also for the chocolate hearts it gives out after each flight, but filed for administration in August after years of losses.

Thomas Cook’s German airline Condor, which had also been interested in some of Air Berlin, declined to comment on Saturday.

The grounding of Air Berlin from Saturday means passengers in Germany could struggle to find plane tickets this winter. Lufthansa is using bigger planes meant for intercontinental routes on some short trips but says it cannot make up the gap on its own.

EasyJet said it would run a reduced timetable at Tegel during the winter, but would aim for a complete summer schedule in 2018.

The airline will look to recruit around 1,000 Air Berlin pilots and cabin crew, on local contracts and has also written to crew at its Hamburg base, which it is closing, to say there is a place for them in Tegel if they want. [nL9N1FH01R]

Reporting by Victoria Bryan in Berlin, Alistair Smout in London and Parikshit Mishra in Bengaluru; Additional reporting by Nadine Schimroszik in Berlin and Tom Sims in Frankfurt; Editing by Alison Williams