Niki joins the Vueling family

The Niki subsidiary of now-defunct AirBerlin is to join IAG as part of the Vueling LCC operation. The new ownership deal comes just a couple weeks after Niki halted operations. Details around the resumption of flights remain unclear but presumably IAG/Vueling will work to get that back quickly, though likely not immediately to 100% utilization given the lower demand of the winter season.

Read More: The collapse of Niki

Niki’s assets were initially planned to be sold to the Lufthansa Group during the bankruptcy proceedings. That deal collapsed under concern from European regulators and insufficient divestitures from the Group. Former owner and founder Niki Lauda also expressed interest in regaining control of his former airline but the IAG offer pleased the AirBerlin administration team more. And, quite frankly, the Vueling integration is far more likely to result in an operation that survives.

IAG’s win here also brings the group back a significant connection flow on the European continent. Madrid, Barcelona and London are poorly placed for most connecting passengers, particularly compared to Frankfurt, Munich, Zurich, Paris and Amsterdam. Then again, for point-to-point travelers within Europe the number of nonstop flights available through LCCs continues to grow. That mitigates the value of the connection hubs in many instances.

Vueling is also not a oneworld member, reducing the value of this transaction to partner airlines. Nor is Vueling a member of the transatlantic joint venture of British Airways, American Airlines, Finnair and Iberia. In that sense the deal is far better for IAG and its “local” airlines than the broader partnerships. Especially compared to AirBerlin’s full oneworld membership status (and Niki’s associate member status), even if the carrier did skirt some rules around lounges and such.

The overall Niki fleet is small; it is a fifth the size of Vueling’s overall operation. Still, a 15 aircraft fleet based in Austria offers the company significant expansion opportunity, as does the operational base and existing Niki route structure and the landing slots portfolio. The aircraft are relatively similarly configured to Vueling’s so that should make the integration easier. Presumably the Niki aircraft will also be added to the Inmarsat EAN inflight connectivity order as well.

Vueling Austria will operate as a newly formed subsidiary of Vueling and run as a separate company from the Barcelona operation. That’s not great for operational efficiency but for the ~740 employees who get to keep their jobs it is very good news.

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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, and LinkedIn.


    1. I can’t see how he would be involved in a manner that is useful to IAG/Vueling. They don’t need his money and I doubt they want him as part of the management team.

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