Lufthansa in talks for two more rivals
The Local · 28 Aug 2008, 18:00
Published: 28 Aug 2008 18:00 GMT+02:00
The German flyer on Thursday said it’s in talks to buy 45 percent of Brussels Airlines for €65 million just hours after German-owned British company Tuitravel plc said it was meeting with Lufthansa and Thomas Cook Group about merging their airline divisions.
This comes after Lufthansa earlier in the week confirmed it wanted to buy Austrian Airlines, which is being sold by the Austrian government. On top of that, analysts say Lufthansa is likely to end up with the healthy portions of Alitalia.
Media executive and some-time Italian premier Silvio Berlusconi is currently trying to rewrite Italian bankruptcy law to allow him to pick out and sell the profitable parts of Alitalia before binning its ailing limbs.
Why are all these companies so eager to hook up with Lufthansa? High-altitude fuel prices and low-flying consumer sales are pushing most airlines to the brink of existence. Lufthansa has remained relatively healthy amid the turbulence, allowing it to offer one-time rivals safe harbour.
The German company said if it bought the minority Brussels Airlines stake it would also win the right to buy the outstanding majority stake, though it gave no potential time frame.
It’s also talking with Tuitravel and Thomas Cook in hopes of forming an international discount airline to take on Air Berlin, which has grown to become Germany’s No. 2 airline and a serious threat to Lufthansa.
If successful, the talks would merge Lufthansa’s Germanwings discount unit (and possibly its minority owned Eurowings regional airline) with charter airlines Tuifly and Thomas Cook’s Condor.
The move likely irks Air Berlin, which last month bailed on an offer for Condor, ostensibly because of rising fuel costs but more likely due to consternation on the part of competition regulators.
The news led to significant gains in the stock of all the mentioned airlines Thursday.