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Remains of former luxury: Lufthansa is buying subdivisions of Air Berlin

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Remains of former luxury: Lufthansa is buying subdivisions of Air Berlin
October 12
09:00 2017

The bankrupt German air carrier Air Berlin began to sell off assets. So, today an agreement to sell certain units of the failed company to another German air carrier – Deutsche Lufthansa AG has been signed.

The press release issued on this occasion says that two subsidiaries of Air Berlin – Niki Luftfahrt GmbH (based in Austria) and Luftfahrtgesellschaft Walter mbH (registered in Dortmund) are subject to sale. The transaction amount is estimated at 210 million Euros.
In order to implement the agreements on the sale of assets, the transaction must pass through the audit of the regulatory bodies.

The CEO of Lufthansa said that in addition to buying assets, his air carrier was planning to buy about 80 aircraft previously owned by Air Berlin. Carsten Spohr, CEO of Lufthansa, also said that the company was going to employ about three thousand employees of the bankrupt air carrier. Thus, the amount of the proposed investment from Lufthansa will be about 1.5 billion Euros.

It also became known that, in addition to the German air carrier Lufthansa, the British budget air carrier easyJet Plc was interested in Air Berlin assets. They are planning to buy back part of the fleet.

Negotiations with other potential buyers are also reported.
We recall that the bankruptcy was announced two months ago. The reason was the refusal to finance the German air carrier by the main shareholder –the company Etihad Airways.

Over two years the German company with the history of almost forty years has been trying to get out of the crisis. Airplanes were being sold and the staff was being reduced, but all the attempts were unsuccessful. At the end of 2016, the company’s loss amounted to about 780 million Euros with revenues of 3.79 billion Euros.

At present the air carrier continues to fulfill its obligations to the passengers. Such decency is secured by a loan of 150 million Euros, provided by the German government.

The material was prepared with the participation of Andrey Majorov,
a leading analyst of the brokerage company CT Trade

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