Lufthansa may lease aircraft from Air Berlin
30-Jan-2017 Today the Bundeskartellamt has cleared the wet-lease agreement on 38 passenger aircraft between Lufthansa and Air Berlin. The agreement was proactively notified by the parties according to German merger control rules. With the wet-lease agreement Air Berlin will lease 38 aircraft of the types Airbus A319 and A320, including cockpit and cabin crews, to Lufthansa and its subsidiaries Eurowings and Austrian Airlines. The aircraft are stationed at German and Austrian airports. The agreement has a term of six years; the term can be extended subject to certain conditions. As is common in wet-lease agreements, the responsibility for, inter alia, flight operation, crew planning and maintenance remains with the wet-lease provider, in this case Air Berlin.
Andreas Mundt, President of Bundeskartellamt: "This case raised specific questions. From a competition perspective, the lease of aircraft from a competitor needs to be assessed differently than the takeover of the competitor itself. The agreement between Lufthansa and Air Berlin does not relate to the routes served by the two air carriers. Lufthansa will not take over any of Air Berlin's slots. Nor will the lease of the aircraft affect the re-allocation of slots that have so far been used by Air Berlin. Naturally, with the additional aircraft Lufthansa will be able to expand its business. However, this potential expansion is not sufficient to justify a prohibition of the agreement."
The case involved complex legal questions and raised issues that required clarification. To provide answers, the Bundeskartellamt evaluated extensive market data and talked to a large number of market players. Several competitors of Lufthansa submitted comments in which they opposed the wet-lease agreement. The majority of customers and travel agents questioned, on the other hand, did not express any serious competition concerns.
The Bundeskartellamt also held intense talks with the Airport Coordinator Germany. The investigations showed that the wet-lease agreement would not affect the re-allocation of slots that were returned by Air Berlin.
On account of the results of the competition assessment, it could be left open whether the wet-lease agreement does in fact constitute a merger within the meaning of the German competition law.
Other aspects of the restructuring process which Air Berlin is currently undergoing (in particular the planned joint venture between TUI, Etihad and Niki) were not the subject of the notification and therefore not part of the Bundeskartellamt's investigations.
Source: Bundeskartellamt