Air Berlin’s final flights are set for 28 October 2017. The company informed employees today that short-haul operations “will as far as we know no longer be possible after October 28 at the latest.” The long-haul operations will end on 15 October as previously announced due to aircraft lease returns. Lufthansa and EasyJet remain in negotiations for portions of the Air Berlin operations but an interesting twist may alter those potential deals.
The exclusive negotiations period between Air Berlin and the two suitors expires on the 12th, leaving just a few days to secure a deal. And, according to a few sources, the EasyJet side of the negotiations may be facing external challenges. Reports have the British carrier lowering its offer for approximately 30 aircraft and certain airport slots. It seems that EasyJet may now have a different bankruptcy buyout target in mind.
The cessation of operations by Monarch Airlines last week opens up opportunity for EasyJet in the form of landing slots at London’s Gatwick airport. Growing operations at its largest base would likely give EasyJet a better return on investment. It could also improve the interline operations with Norwegian’s long-haul flights while simultaneously protecting against further growth from Norwegian on the competitive short-haul markets. EasyJet has been known to go after Gatwick slot portfolios in the past, including a 2013 deal with FlyBE. The Monarch slots are expected to be sold off via auction in the coming weeks according to the KMPG team managing the disposition of assets.
A lowered interest in the German positions could cost creditors – including the German Government – some cash along the way. It also open up questions about just how in demand the slots Air Berlin assets, particularly slots in Dusseldorf and Berlin-Tegel really are. Will Ryanair renew its efforts to claim the slots, for example?
There are also questions around how long it will take for any negotiated transactions to be reviewed and acted upon by German and EU regulators. Typically those efforts are measured in weeks to months, not hours to days. Even if deals are struck this week getting approval by the end of the month appears unlikely. Which is to say that passengers holding Air Berlin tickets for travel in November and beyond are unlikely to enjoy the outcome of those trips.
Employees are also likely to be adversely affected. While many expect that cabin and flight crews will be able to transition to the new operations as those deals are sealed a break in service and, therefore employment, seems likely. Plus, many administrative and marketing roles will disappear with the cuts. I wonder how many “disgruntled Air Berlin employee” costumes will show up at Halloween this year.
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