Frankfurt: The head of German carrier Lufthansa on Thursday announced that his company was set to take a majority stake in failed airline Air Berlin, which filed for insolvency earlier and was temporarily being kept afloat by a bridging loan from the German government.
Lufthansa Chairman and CEO Carsten Spohr said the giant would sign the deal, which would mean the acquisition of parts of Air Berlin, including 81 aircraft and 3,000 employees, for a price tag of 1.5 billion euros ($1.78 billion), Efe news reported.
“We will see a milestone in the history of Lufthansa and Air Berlin,” Spohr said. He added he expected the European Union to approve the deal by the end of the year.
Air Berlin declared itself insolvent on August 15 after losing financial support from its majority investor, Etihad Airways, and began negotiations with Lufthansa and the United Kingdom’s easyJet, which were set to conclude on Thursday.
While it conducted the negotiations, Air Berlin’s planes were kept in the air by a government loan of 150 million euros.
In 2016, Air Berlin showed a record 782 million euros in losses — a 75 per cent increase compared to 2015 — which the company attributed to restructuring costs and depreciation.