Austrian LCC and former Air Berlin subsidiary Niki airlines is no more. The carrier announced today that it would halt operations, filing for insolvency as the planned acquisition by Lufthansa fell through. With no funding immediately available flights are being canceled, leaving many potential holiday travelers out in the cold. The carrier indicated it was in discussion with other European airlines to assist with repatriation flights but nothing is confirmed yet.
Niki was one component of the major Lufthansa investment in Air Berlin’s assets as the latter closed up shop earlier this year. The massive overlap of Air Berlin and Lufthansa operations raised objections from regulators, however, fearing that Lufthansa would be too strong in the consolidated role. Negotiations with the European Commission are ongoing but the latest Lufthansa offer to cede landing slots proved insufficient according to reports.
Objections to the Lufthansa Group growth through the Air Berlin asset acquisition have proved loud and sustained. EasyJet is helping to mitigate some of the concerns with a ~$47mm asset buy focused mostly on Berlin-Tegel. The LCC faces some challenges in running a split operation across Tegel and Schoenfeld airports in Berlin but the overall outcome should be reasonable, particularly given that EasyJet doesn’t generally sell connecting flight itineraries. Its new Berlin operations open up domestic business markets and regional leisure destinations for consumers in the German capital city. The EasyJet deal was approved by regulators without any objections.
But while EasyJet took on Lufthansa in Berlin the Niki acquisition would leave too much of the German/Swiss/Austrian market consolidated in one group’s control. It is unclear if dropping Niki will be sufficient for regulators to approve the balance of Lufthansa’s planned acquisition. It is also unclear if Niki will shift to liquidation or if another investor might come in to restart operations. Founder Niki Lauda has repeatedly suggested that he is interested in resuming control of the company but as yet no progress appears to have been made on that front.
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