Lufthansa's Eurowings eyes some Air Berlin operations: paper

The logo of Lufthansa's low-cost brand Eurowings is pictured during the presentation of Eurowings' first long-haul flight to Havana, Cuba, at Cologne-Bonn airport, Germany, November 2, 2015. REUTERS/Wolfgang Rattay

FRANKFURT (Reuters) - Lufthansa's LHAG.DE budget unit Eurowings, which it sees as a tool for consolidation among European airlines, is considering acquiring some of loss-making rival Air Berlin's AB1.DE routes, German daily Handelsblatt reported, citing sources.

The paper, in an advance copy of a story to be published on Wednesday, said Lufthansa was in talks with Air Berlin’s largest shareholder Etihad over routes serviced by 40 aircraft outside of Air Berlin’s main Duesseldorf and Berlin bases.

Lufthansa and Etihad declined to comment.

However, two Lufthansa sources said it was unlikely that Lufthansa would be interested in Air Berlin, which is struggling to return to profit despite restructuring efforts.

In addition, any combination of Germany’s two largest airlines would likely raise antitrust concerns, they said. In Hamburg, for example, Lufthansa and Air Berlin would have a joint market share of almost 70 percent.

Eurowings managers have also said they don’t see the unit as a collection point for ailing airlines.

Reporting by Peter Maushagen; Additional reporting by Victoria Bryan; Editing by Ruth Pitchford