Germany's Federal Court of Justice stated it has awarded Lufthansa and airberlin the right to pursue legal action over subsidies given to Ryanair (Reuters, 14-Feb-2011). The two German airlines allege that the subsidies came in the form of lower airport charges at Frankfurt Hahn and Hamburg Lubeck airports. The European Commission is also currently investigating allegations the Irish LCC enjoys subsidies at other German airports. Ryanair maintains it never sought or accepted state aid.
airberlin and Lufthansa win right to challenge Ryanair over alleged subsidies
You may also be interested in the following articles...
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.
airberlin continues to shrink. Etihad remains supportive, but internal solution is needed
airberlin's 2015 losses highlighted its ongoing struggle to find a successful model. In 2012 airberlin received investment from Etihad (also entering into a close commercial partnership with it) and joined oneworld. These moves have brought it benefits in terms of traffic and revenue, but traffic and revenue continue to shrink and airberlin has remained loss-making.
Since 2011 airberlin has cut capacity heavily on the short/medium haul network (particularly in domestic markets). Short/medium haul still dominates airberlin's operation, but it is now growing its long haul network aggressively by adding capacity to North America and the Caribbean. Squeezed between lower-cost LCC competition on short/medium haul routes on the one hand, and legacy airlines with bigger long haul networks on the other, it is also now facing low cost long haul competition from Lufthansa's Eurowings.
On 31-May-2016 the Etihad Aviation Group CEO, James Hogan, said: “airberlin has faced greater challenges and has taken longer than we expected to reach sustainable profitability, but the underlying fundamentals of the business are trending in the right direction." Etihad's investment has been critical to airberlin's survival and the airline has, so far, remained committed to the relationship. However, there is only so much that Etihad can do from the outside. airberlin needs internal solutions.