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Abu Dhabi, UAEMonday 25 June 2018

UK's easyJet to take bust Air Berlin's leases and Berlin slot

As German carrier is liquidated, British no-frills airline swoops with  €40m deal

Fire trucks mark the arrival of the final Air Berlin flight on Friday.  Sean Gallup/Getty
Fire trucks mark the arrival of the final Air Berlin flight on Friday. Sean Gallup/Getty

EasyJet will take over leases for as many as 25 of Air Berlin's planes and gain access to a second airport in the city as the one-time second-biggest German airline is liquidated.

EasyJet will pay €40 million(Dh170.5m) for the Airbus A320 aircraft leases and take-off and landing slots at Berlin Tegel Airport, the Luton, England-based discount carrier said. It also has launched a recruitment campaign to attract about 1,000 of Air Berlin’s pilots and cabin crew. The deal is subject to regulatory approval.

“This will enable easyJet to operate the leading short-haul network at Tegel connecting passengers to and from destinations across Germany and the rest of Europe,” the company said. “This is in addition to easyJet’s existing base at Berlin Schoenefeld and would mean that easyJet would be the leading airline in Berlin.”

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The deal bolsters easyJet’s presence in Europe’s largest economy and shores up a front against the region’s biggest discounter, Ryanair . Both carriers have bases at Schoenefeld airport in the east of the German capital city, while Air Berlin’s main hub was at Tegel in the west, closer to federal government offices. The Ryanair chief executive Michael O’Leary decided against bidding for Air Berlin assets, complaining that administration proceedings were a “stitch-up” between Germany’s government and the country’s dominant mainline carrier, Deutsche Lufthansa.

Acquiring parts of Air Berlin would help easyJet make up lost ground in Germany, where it lags well behind Ryanair. The UK company announced in June that it will shut a base in Hamburg, where it stations four A320-series planes, at the end of the summer 2018 season, leaving only its Berlin operation, which utilizes 12 aircraft. Ryanair flies nine planes out of Berlin, and has nine other German bases, including Cologne-Bonn, Hamburg and Frankfurt.

A €210m, 81-aircraft agreement that Lufthansa reached on Air Berlin assets in mid-October is likely to face European Union anti-trust scrutiny, the head of Germany’s Federal Cartel Office has said. The Lufthansa chief executive Carsten Spohr estimates that integrating Air Berlin operations will take at least 12 months and cost a total €1.5 billion.

Air Berlin filed for insolvency administration in August when its main shareholder, Etihad, halted support after years of losses at the German carrier. Lufthansa, easyJet and Ryanair are circling the remains of another failed airline, Rome-based Alitalia, which began bankruptcy proceedings in May.

EasyJet also has its eyes on the collapsed UK competitor Monarch Airlines, which operated 35 aircraft to destinations such as Spain and Portugal, and folded in early October, leaving vacant takeoff slots at easyJet base airports including Luton and London Gatwick.