Formula 1 racing star Niki Lauda, who built two successful airlines and sold them to German companies, is now joining the chorus of criticism surrounding Lufthansa’s expected purchase of the bulk of its main German rival, bankrupt Air Berlin.
“Since the beginning of the year, Lufthansa planned to incorporate the lucrative bits of its annoying competitor, Air Berlin,” Mr. Lauda told Handelsblatt. “This plan has been coordinated with politicians from the outset. I tip my hat to Lufthansa CEO Carsten Spohr.”
Executives from Air Berlin, Germany’s second largest carrier, are scheduled to meet with the airline’s creditor committee on Wednesday to discuss offers for breaking up the company and its fleet of leased planes. An outright sale has been ruled out. Besides Lufthansa, the low-cost airlines easyJet and Condor are making bids for Air Berlin assets and routes.
Mr. Lauda had been a member of Air Berlin’s executive board after the airline purchased nearly half of his short-haul airline, Niki, in 2011. The remaining majority ownership remained in the hands of Lauda’s private foundation, Lauda Stiftung, until Air Berlin sold its shares in Niki to Etihad, the airline in the United Arab Emirates that had also bought a one-third interest in Air Berlin.
“Tickets will obviously become more expensive.”
While Niki is consolidated in Air Berlin’s accounts, the majority of shares are still in the control of another private Austrian foundation, Niki Stiftung, and the company is not part of the Air Berlin bankruptcy proceedings.
Mr. Lauda said the merger of Lufthansa and the majority of Air Berlin will create a monopoly situation for most Austrian travelers because Austrian Airlines, the flag carrier, is also owned by Lufthansa group. “Tickets will obviously become more expensive,” he noted. “The less competition, the higher the prices.”
When asked if he thought the European Union’s antitrust regulators would look at the deal, Mr. Lauda scoffed and said the planned merger will sail through the approval process because the German and Austrian governments both support it.
“They will require Lufthansa to give up a few slots at airports to low-cost competitors like easyJet,” he said. “But this does not represent fair competition.”
A number of critical voices have been raised about the way the deal has been structured, with the government giving the airline’s creditors a €150 million ($177 million) guarantee so that the airline can afford aviation fuel and won’t leave summer travelers stranded in their destinations.
One of the most vocal critics has been Hans Rudolf Wöhrl, an entrepreneur who bought the German subsidiary of British Airways for a pittance and then sold it to Air Berlin at a vast profit.
Mr. Wöhrl contends that the government kept the timing of its bailout secret in order to benefit Lufthansa’s bid for part of the airlines. He said he would have put in a competing bid to buy the entire airline if he had known that it was about to file for bankruptcy.
In addition, he has accused Air Berlin CEO Thomas Winkelmann, who once worked for Lufthansa’s low-cost airline, Germanwings, of arranging the breakup of Air Berlin for his former boss, Lufthansa CEO Mr. Spohr. He said Mr. Winkelmann “obviously still represents the interests of Lufthansa.”
Mr. Winkelmann has called Mr. Wöhrl’s charges a “PR stunt.”
Ryanair, the low-cost Irish airline which competed against Niki, also filed a formal complaint with the cartel offices in Brussels and Berlin about the way the bailout and sale was arranged.
Hans-Peter Siebenhaar is Handelsblatt’s correspondent in Vienna and specializes in media and telecommunications coverage. Charles Wallace adapted this story to English. To contact the author: firstname.lastname@example.org