Fixed game for Air Berlin?

Lufthansa and two other parties are currently in talks with now insolvent Air Berlin about partial takeovers after its main shareholder Etihad turned off the money supply at the weekend. The German government drew criticism from airline competitor Ryanair after vouching for a bridging loan to keep the airline afloat in the short term. Commentators investigate the background story.

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Der Standard (AT) /

Battle for take-off and landing rights

Der Standard explains why Lufthansa has a vested interest in Air Berlin receiving state aid:

“Lufthansa's goal is to prevent Air Berlin's flight operations from being closed down because if that happens its coveted take-off and landing rights will go to other airlines. Lufthansa naturally wants to prevent this for reasons of competition, and it was also one reason why the German government gave the airline a bridging loan. As long as Air Berlin keeps flying, Lufthansa can negotiate the takeover of parts of the Air Berlin group. But it can't take over all the slots and the Air Berlin planes single-handedly. Air Berlin prefers Easyjet as a buyer, which is less aggressive on the market than Ryanair.”

Frankfurter Rundschau (DE) /

EU needs clear aviation strategy

Frankfurter Rundschau hopes the bankruptcy will lead to changes in Europe's aviation policy:

“There is probably no other area of economic policy where policies are so inconsistent. The EU Commission has been pushing to liberalise air travel for over two decades, but whenever things get rough it always gives in, with the result that airlines that were no longer airworthy kept flying. … Brussels has covertly set itself up as a sponsor of budget airlines and this has manifested itself for example in the way it has generously chosen to ignore the subsidies they have received from airport operators. … We need a consistent EU strategy that puts an end to the charges dumping of the airports and wage dumping of the budget airlines.”

Der Standard (AT) /

An expected crash

The collapse of Air Berlin has been on the cards for a long time, Der Standard explains:

“Flights took off late or not at all, luggage never arrived, at financial press conferences there was nothing but bad news. And in between lay the desire to be involved in everything: short, mid and long haul flights. Transporting budget tourists and business travellers. One management team after the next failed to find a way out of the one-size-fits-all formula and the debts mounted. That the main shareholder Etihad no longer wanted to wait for an orderly resolution but turned off the money supply prematurely is bitter, but by economic standards, it was only to be expected.”

Süddeutsche Zeitung (DE) /

No one needs this airline

Air Berlin has failed owing to bad management, proclaims the Süddeutsche Zeitung:

“Etihad forced the German subsidiary to focus on business travellers, a segment in which Air Berlin could not compete against Lufthansa and all the other alliances. At the same time Air Berlin neglected the area in which it had initially been successful, holiday travel. Because Ryanair, Easyjet and the other budget airlines dominate the private travel market as they operate more cheaply and follow business models that actually work. The truth is that no one needs Air Berlin. As understandable as it is that the government is now supplying a bridging loan so that the planes can at least take to the air and ensure that holidaymakers make it home in the coming weeks, it is equally important that no more state aid follows.”

Neue Zürcher Zeitung (CH) /

Market correction better than subsiditis

The Neue Zürcher Zeitung warns against the idea of keeping Air Berlin afloat at the public expense:

“Keep the company going using German tax money? It doesn't make sense either in Rome or Berlin to pump public money into an airline that can't survive on its own. As was the case with the Alitalia bailout manouevre, this would once again raise the question of whether so-called 'bridge financing' is not a violation of the European Union's ban on state aid. A market correction would be preferable to drifting towards murky 'subsiditis'.”