Air Georgian announced (12-Sep-2013) it has signed a MoU to merge with Regional 1 Airlines, with the carrier to operate under one management team through the creation of a parent holding company. Air Georgian will continue to focus on its capacity purchase agreement with Air Canada, with Regional 1 Airlines to focus on the expansion of its domestic presence. Air Georgian president Eric Edmondson will assume the role of president and CEO of the newly formed parent company, as well as the role of president at Air Georgian and Regional 1 Airlines. Daniel Revell will continue as CEO of Air Georgian, with John Binder to continue as CEO of Regional 1 Airlines. Air Georgian president Eric Edmondson said: "I look forward to the opportunities presented by this strategic merger of two industry leaders. We are excited about our continued support of and dedication to our main partner Air Canada under the brand name of Air Georgian with its own dedicated and professional management team focused solely on bringing value to our CPA relationship. Regional 1 Airlines gives us a platform to aggressively pursue both domestic and international charter opportunities with significant existing expertise in operating ACMI leases, overseas field operations and remote environment start-ups." Avmax Group CEO John Binder said: "We look forward to capitalising on the strengths of Air Georgian, Regional 1 Airlines and Avmax Group. Our goal will be to provide full services solutions to our customers." [more - original PR]
Air Georgian and Regional 1 Airlines sign merger agreement
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Lufthansa to complete takeover of Brussels Airlines for possible integration into Eurowings
Lufthansa's supervisory board has approved the exercise of its call option to buy the remaining 55% of SN Airholding, the parent company of Brussels Airlines. Lufthansa acquired 45% of the company in 2009 and negotiated the option to buy the balance of the shares for no more than EUR250 million. The deal is expected to close in early 2017, once the details of the purchase have been agreed with the other SN Airholding shareholders.
Lufthansa and Brussels Airlines have an extensive codeshare agreement and are partners in the Star Alliance. Their existing relationship is such that Brussels Airlines already feels like a member of the Lufthansa Group. The main draw for Lufthansa has always been its Belgian partner's extensive African network (it is the number two airline on Western Europe-Central/Western Africa).
However, it now seems that Lufthansa will, at least partly, integrate Brussels Airlines into its Eurowings low cost brand. Lufthansa is keen to accelerate Eurowings' expansion through partners (and is also to wet-lease up to 35 aircraft from airberlin). Brussels Airlines' fleet and single-class configuration on short/medium haul should fit with Eurowings, but its unit cost and network airline business model are not characteristic of an LCC.
TUIfly, easyJet, airberlin, NIKI, Eurowings eye partners in Germany's aviation market upheaval
Ryanair's expansion and Brexit are among factors which may have prompted reports about possible consolidation and other forms of co-operation involving Germany's leading airlines. These include - apparently false - speculation that easyJet has considered buying a stake in TUIFly (possibly to ensure that it has access to EU traffic rights post Brexit) and that TUIFly, a charter airline with growing seat-only sales, may be integrated with airberlin subsidiary NIKI and the TUIFly aircraft currently operating airberlin routes under wet lease.
An expanded TUIFly operation could, perhaps, better withstand fast-growing competition from Ryanair in Germany, although these stories have been denied. A more definitive development, announced by both parties, is that up to 40 of airberlin's narrow body fleet will be wet-leased to Lufthansa Group for its LCC Eurowings and Austrian Airlines. Airberlin will also put its leisure operations into a separate unit. These moves should partly alleviate airberlin's overcapacity problems, while accelerating the growth of Eurowings (further boosted by the possible integration of Brussels Airlines into the LCC).
Even if the other stories prove mere speculative, the frequency of such reports highlights the need for consolidation in Europe, whose centre is Germany. Moreover, they throw light on the rapid pace of change in business models in what has historically been a very conservative aviation market.