Bulking Up For The Airline Wars

120558330 Lufthansa Alitalia DPA
Lufthansa is hoping to land Alitalia next. Source: DPA

At the beginning of this year, Lufthansa’s prospects looked pretty gloomy. Low-cost Irish carrier Ryanair was likely to surpass the German flag carrier in terms of passengers, while higher fuel prices led a number of analysts to downgrade the company’s shares, which were in the doldrums.

Just 10 months later, Lufthansa is going from strength to strength, snapping up most of its German rival, Air Berlin, for a bargain basement price of €210 million ($247 million), and on Monday reportedly offering €500 million to buy the operations of bankrupt Italian carrier Alitalia. The German airline’s share price has rocketed from €11 to over €25.

The price of oil was cited by analysts in January as the reason for Lufthansa’s poor prospects. Now, ironically, it looks like the main reason for Lufthansa’s comeback – and for the fall of one of its biggest erstwhile rivals.

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