Lufthansa, airberlin Deal Focus of Ryanair’s Attention

Photo: Boris Roessler / dpa via AP

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The news that Lufthansa plans to wet lease 38 aircraft from its competitor, airberlin, has resulted in Ryanair CCO, David O’Brien, announcing at a media briefing in London that the Irish low-cost carrier will soon be lodging a complaint based on the grounds it is anti-competitive.

The deal between Lufthansa and airberlin, which was agreed in December 2016, will see Eurowings and Austrian Airlines, both subsidiaries of Lufthansa, operate the Airbus A319 and A320 aircraft for a period of six years. While Austrian Airlines will take five of the aircraft, the remaining 33 will be used by Eurowings to phase out up to 20 of its older A320s. Additionally, the deal includes a codeshare agreement between Etihad Airways – the equity partner of airberlin, and Lufthansa.

O’Brien is quoted as saying that: “airberlin should not exist. We will certainly be making a submission on airberlin and Lufthansa. It is entirely blocking maneuver. If it has four legs, a tail and it barks, it’s probably a dog. Naturally enough, we will be making a complaint. It merits exploration”. He also questioned why the deal, which has the potential to affect up to 200 jobs, had not been objected to by Lufthansa’s pilots.

News of Ryanair’s impending complaint comes a week after it was revealed that Lufthansa had lost its crown to Ryanair as Europe’s largest airline based on passenger numbers.

Lufthansa’s 109.7 million passengers in 2016 was eclipsed by the 117 million passengers reported by Irish low-cost carrier Ryanair – a 15 per cent increase on the previous year.

Despite losing its number one slot, Lufthansa remained positive for business in 2017, despite analyst downgrades affecting its share price.

“We had our first board meeting of the year and we have a quite positive spirit towards 2017,” Carsten Spohr said in Frankfurt last week.

When asked at the time if Lufthansa could take over the rest of airberlin, Spohr said there would be three main problems – Air Berlin’s high cost base, its debt pile of over €1 billion (US$1.07)) and antitrust restrictions.