The European Commission has given formal approval for Lufthansa Group to acquire Luftfahrtgesellschaft Walter mbH (LGW), the regional carrier formerly controlled by the insolvent Air Berlin Group. The decision follows an extensive assessment of the planned transaction by the European Union’s competition authorities in their merger control capacity after the Lufthansa Group concluded an agreement in October to take over parts of Air Berlin.

The official transaction for the transfer of LGW is scheduled for January 2018 and is conditional on Lufthansa’s compliance with commitments to avoid competition distortions. The Commission’s decision only concerns Lufthansa’s proposed acquisition of LGW since Lufthansa decided to drop its acquisition of NIKI Luftfahrt GmbH (commonly known as NIKI).

“Our job is to make sure that mergers do not make European consumers worse off. Lufthansa has put forward improved remedies that make sure the effects of its LGW acquisition on competition are limited. In particular, at Düsseldorf airport, Lufthansa’s slot portfolio would only increase by 1% – half of all the slots would be held by Lufthansa’s competitors. This addresses our competition concerns, so we approved the proposed acquisition today under EU merger rules,” said Commissioner Margrethe Vestager.

An AirBerlin jet rolls past a Lufthansa plane on October 10 at Duesseldorf Airport. Lufthansa’s purchase of AirBerlin Group’s regional carrier has been approved.
Photo Source: Patrik Stollarz / Getty Images

The transaction of LGW will allow thirty-three (33) to be added to the Eurowings Group fleet. Twenty (20) of the planes will be Bombardier Dash 8 Q400s and the remaining thirteen (13) will be Airbus A320 family planes. All of LGW’s employees will be transferred to Eurowings with their current contracts. In addition, with additional recruitments, the number of workers in LGW’s team should rise to ~870 in 2018.

“This regulatory approval of our acquisition of LGW is an encouraging development,” says Thorsten Dirks, Member of the Lufthansa Group Executive Board and CEO of Eurowings. “And I am especially pleased that we can offer our new employees promising prospects within Europe’s fastest-growing airline.”

Eurowings has hired close to 500 new employees this month, most of which are pilots and flight attendants. The airline says that it has collective expansion agreements with unions to allow all flight operations of Eurowings to be able to grow in the near term without exception.

“We have the support of our social partners, we are an attractive employer, we have and will be getting more first-rate employees – with these conditions, Eurowings will continue to be a growth engine in 2018,” said Dirks.

Featured image by Anna Zvereva via Wikimedia Commons

Categories: Industry Talk