Niki grounded after Lufthansa drops plans to purchase it

Lufthansa announced quitting the pursue of Niki as part of the latest concessions made on December 13, 2017 in the course of the intended acquisition of parts of the Air Berlin Group. Consequently, Niki ceased operations.

In the so-called Phase One assessment, Lufthansa had already offered commitments such as giving up slots. However, the Commission considered this to be insufficient and indicated that an acquisition of Niki and its integration into the Eurowings Group would be not approved, the company announced in a statement.

With regard to the still intended takeover of Luftfahrtgesellschaft Walter (LG Walter), Lufthansa is still prepared to give up numerous slots in order to obtain merger clearance in Phase One, the company also notes. The transaction is currently being examined by the EU Commission as the responsible merger control authority.

After Lufthansa backed out, the bankruptcy administrator of Air Berlin Group could not find another investor for the Austria-based leisure airline Niki, Reuters reports. Niki has now stopped its operations and began insolvency proceedings.

In October 2017 Lufthansa and Air Berlin signed a €1.5 billion euro purchase agreement for the large parts of the troubled carrier, including over 81 aircraft. In addition, Lufthansa intended to obtain air Berlin’s business units Niki and LG Walter for approximately € 210 million.

The deal has to be approved by the EU Commission, but it is stumbling due to antitrust concerns. The purchase, in its initial form, would allow Lufthansa to become a dominant carrier in both German and Austrian air travel markets.

“We have quite deep competition concerns,” European Competition Commissioner Margrethe Vestager pointed out in the beginning of December 2017 as quoted by Reuters. “There is a risk that on some routes Lufthansa becomes de facto a monopoly, on a significant number of routes.”

Lufthansa Group owns Austrian Airlines, Swiss Airlines, Eurowings and Brussels Airlines, as well as a share in the Turkish SunExpress. In addition, the group includes logistics, technical and service companies.

Air Berlin had filed for insolvency in the middle of August, 2017. Its flight operations stopped at the end of October, 2017, except for the flights by Air Berlin’s brands Nki and LG Walter that continued to operate with the help of Lufthansa up until now.

Source – AeroTime

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