Lufthansa has confirmed it will sign a deal to buy parts of its insolvent smaller German rival Air Berlin. As Sonia Legg reports, Germany's second largest airline filed for insolvency on Aug. 15. A government loan has been keeping its planes in the air.
All smiles after a big breakfast for Lufthansa's CEO. The occasion - an imminent deal to secure some of Air Berlin's assets, two months after Germany's second largest airline filed for insolvency. (SOUNDBITE) (German) LUFTHANSA CHIEF EXECUTIVE, CARSTEN SPOHR, SAYING: "We need three (global players) in Europe and this step will bring the Lufthansa Group forward." It's thought Lufthansa will take over the Austrian airline Niki, Air Berlin's regional operation LG Walter and some short-haul aircraft. Its shares rose 3 percent on the news - the top performer on the Dax. Analysts are predicting the deal could add between 70 - 90 million euros to the annual operating profits of Lufthansa's budget airline Eurowings in the medium term. And any worries about them holding a monopoly were quickly brushed off. (SOUNDBITE) (German) LUFTHANSA CHIEF EXECUTIVE, CARSTEN SPOHR, SAYING: "Lufthansa holds a global market share of 3 percent, in Europe it's 14 percent, we are far from holding a monopoly." Britain's easyJet has been discussing buying up to 30 planes. Valuable take-off and landing slots in Berlin and Duesseldorf are also up for grabs. But time is running out. Air Berlin will cease operating at the end of the month