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Rivals wait in the wings to buy collapsed airline assets

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Insolvent German airline Air Berlin aims to strike deals to sell assets to two or more buyers by the end of September, before a government loan keeping its planes in the air runs out, its chief executive said.

The group is in talks with a total of three aviation firms, including Lufthansa, German newspaper Frankfurter Allgemeine Zeitung (FAZ) quoted the airline’s CEO Thomas Winkelmann as saying in its Thursday edition.

All three are “reputable in terms of their finances, sufficiently large to offer Air Berlin a secure future and are interested in keeping Germany as a base of operations”, he said, without naming any of the interested parties.

Air Berlin, Germany’s second-largest airline, filed for bankruptcy protection on Tuesday after key shareholder Etihad Airways withdrew funding following years of losses, leaving valuable runway slots up for grabs.

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The insolvency comes with thousands of Germans enjoying summer holidays, and just ahead of a September general election.The German government granted a bridging loan of 150 million euros to allow Air Berlin to keep its planes in the air for three months and secure the jobs of its 7,200 workers in Germany while negotiations go on.

The move offers Lufthansa and rivals a chance to acquire slots at airports such as Berlin Tegel and Duesseldorf, with Germany’s largest airline keen to defend its domestic position against expansion by low-cost rival Ryanair.

According to Winkelmann, the negotiations also include assets of Air Berlin unit Niki, which Etihad had agreed to buy for 300 million euros ($354 million) earlier this year.

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Meanwhile, the German government wants insolvent Air Berlin’s  management to strike a quick deal to sell its assets to other airlines, a senior government official said on Thursday. “All parties are now called upon to negotiate swiftly but responsibly,” Deputy Economy Minister Matthias Machnig told Reuters.

Machnig said Berlin had informed the European Commission of its decision to grant the company a bridging loan of 150 million euros to allow the airline to keep its planes in the air for three months. He added that the government expected the EU to approve the move.

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BT Correspondent
BT Correspondenthttp://www.businesstoday.co.ke
editor [at] businesstoday.co.ke
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