Air Berlin Bankruptcy

Niki passengers strike back

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Niki planes may be staying on the ground a little longer. Source: Reuters

Amid all the skirmishing by big airlines to buy up lucrative runway slots on the cheap as Air Berlin and its Niki subsidiary plunged into bankruptcy, it was easy to forget one minor player in the whole drama – the passenger. But it was the passenger rights advocate Fairplane that thwarted the best-laid plans of airline officials with its successful appeal to have the Niki bankruptcy moved to Austria, the official headquarters of the airline once owned by Austrian racecar champion Niki Lauda.

Although Niki was effectively managed in Germany by Air Berlin officials, its headquarters are officially at the Vienna airport in Schwechat and its operating licenses were granted by Austria. Fairplane thinks it can get a better deal for 3,000 passengers left in the lurch when Niki ceased operations in mid-December if bankruptcy proceedings are transferred to Austria. A Berlin state court agreed that Germany does not have jurisdiction and Monday reversed a lower court decision giving German officials authority to negotiate disposal of Niki’s assets.

The ruling may unravel the deal for British Airways’ parent International Airlines Group to acquire Niki operations and merge them with the group’s own discount airline, Vueling. An appeal of the Berlin state court ruling or starting fresh proceedings in Austria could mean a delay that risks loss of the valuable runway slots and a thousand jobs at Niki.

The successful appeal reminded airline managers who tend to view customers as a commodity that ultimately passengers have rights, too.

The court decision is the latest twist in a saga that saw Lufthansa reinforce its dominance in Germany with the acquisition of some Air Berlin assets but run into a blockade from European Union authorities in Brussels on antitrust concerns when it came to acquiring Niki.

Fairplane hopes to secure the €1.2 million in open claims for the passengers it represents. They argued that Air Berlin bankruptcy trustee Lucas Flöther had little interest in prioritizing their compensation in the Niki proceedings. The Austrian consumer advocate group said the change in venue for Niki doesn’t threaten the IAG deal because the Austrian bankruptcy officials can simply take over the deal if they want. Fairplane has already filed for Niki bankruptcy proceedings in Korneuburg, just outside Vienna.

The claims represented by Fairplane are a fraction of the €36.5 million IAG was willing to pony up for Niki, let along the €180 million Lufthansa was ready to pay before EU objections led it to back out of the deal. But the successful Fairplane appeal reminded airline managers who tend to view customers as a commodity that ultimately passengers have rights, too.

Jens Koenen is aviation correspondent for Handelsblatt. Darrell Delamaide adapted this article into English for Handelsblatt Global. To contact the author: koenen@handelsblatt.com.

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