In late October, LOT Polish Airlines officially failed in its bid to stop easyJet and Lufthansa
from buying former Air Berlin assets. On October 20th, the European General Court
found easyJet and Lufthansa did not get an unfair market advantage by buying the assets.
Air Berlin filed for bankruptcy in August 2017 and ceased flying two months later.
Lufthansa and easyJet promptly moved to buy Air Berlin assets and hire Air Berlin staff.
According to Reuters, easyJet paid US$46.5 million to buy some of Air Berlin’s operations
at Tegel airport. Additionally, it scooped up leases for up to 25
Airbus A320 aircraft and hired around 1,000 former Air Berlin’s pilots and cabin crew.
Lufthansa paid $248 million to take over leases on 80 of Air Berlin’s 130 planes and
crew from Air Berlin’s LGW subsidiary. However, Lufthansa was required to surrender some slots at
Dusseldorf as part of the deal. The two airlines also picked up Air Berlin slots at Zurich,
Hamburg, Munich, and Stuttgart airports. In total, around half of Air Berlin’s
approximately 8,000 employees found work at either easyJet or Lufthansa.
Several European airlines expressed unease over the deals, suggesting it would allow easyJet
and Lufthansa to become too dominant in Germany. Ryanair’s Michael O’Leary said the Lufthansa deal
was a quote-unquote “stitch-up” that would see Lufthansa own 95% of the German domestic market.
Meanwhile, Willie Walsh, then boss of IAG, said he had significant concerns about the deal.
Despite objections, the European Commission approved the deal later in 2017. However,
this resulted in LOT Polish Airlines suing the commission
in the General Court. LOT said the transactions broke the EU’s rules governing fair competition.
Over three years later, LOT got a result on Wednesday,
and it wasn’t what the airline hoped for.
“The General Court dismisses the actions of Polskie Linie Lotnicze
‘LOT’ against the Commission decisions authorizing the mergers concerning the acquisition by easyJet
and Lufthansa, respectively, of certain assets of the Air Berlin group,” the judgment read.
The General Court found Lufthansa and easyJet would not gain unfair market advantages
by buying Air Berlin’s assets, noting the European Commission had a quote-unquote “margin
of discretion” when ruling on complex economic transactions like the disputed Air Berlin deals.
The court said the slots acquired by easyJet and Lufthansa did not give either airline an
unfair advantage and said the airports where the two airlines gained the slots – Dusseldorf,
Zurich, Hamburg, Munich, Stuttgart, and BerlinTegel, were relatively uncongested.
When Air Berlin failed, it was Germany’s second-biggest airline with a 14%
domestic market share. Air Berlin was one of Etihad’s now fabled bad airline investments.
The Abu Dhabi-based airline was the biggest shareholder when Air Berlin went under.
Etihad’s decision to cease funding the failing airline sealed its fate. Before Etihad ended
its support, it had pumped €1.8 billion in Air Berlin. Most of Air Berlin’s aircraft were leased.
The airline’s most important assets were its slots scattered around Germany. At its Berlin-Tegel hub,
Air Berlin had over 45% of the slots. LOT Polish Airlines can appeal to
the European Court of Justice and says it is reviewing the decision.
If you want to find out more about where easyJet is today,
we’ll be speaking more in-depth with the airline’s Chief Commercial Officer, Sophie Dekkers.
Ms Dekkers will join other industry leaders on November 10th and 11th at Simple Flying’s
online Future Flying Forum event. Keep watching to find out what it’s all about...