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EU blamed as Niki files for bankruptcy

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Niki

Lufthansa’s attempted takeover allegedly stopped by EU

Air Berlin subsidiary Niki has filed for bankruptcy and has ceased flight operations. The decision came after Lufthansa revealed it was terminating the purchase agreement for Niki.

Lufthansa argued it had received signals that the European Commission would not approve a takeover, as the EC drew close to concluding an investigation on whether a deal would lead to higher prices and less consumer choice.

Lufthansa had suggested remedies to these concerns last week and improved on the details, but Brussels found the proposals insufficient, according to Lufthansa.

The Austrian low-cost carrier and Air Berlin subsidiary was founded by racing driver Niki Lauder in 2003 and operated to 36 destinations from its base in Vienna.

Too many monopolies
EU officials said that a takeover would have created monopolies on many routes, cementing the market leader’s already strong position at a number of congested airports and making it hard for competitors to enter, the Financial Times reports.

“It was clear from the start that Lufthansa and Air Berlin overlap on a very significant number of routes, with clear risks to Austrian, Germans and Swiss consumers and to effective competition,” the commission said.

The situation was “regrettable, in particular because this was not the only possible outcome since the start of the sales process”.

Two months after Air Berlin filed for insolvency, it was agreed in October that Lufthansa would buy Niki, Air Berlin’s regional airline LGW and 20 aircraft for €210 million. Now these plans have fallen through.

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