Ryanair accuses Lufthansa of Air Berlin 'conspiracy' Published duration 16 August 2017

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Ryanair has accused Lufthansa and the German government of conspiring to carve up collapsed airline Air Berlin.

Lufthansa is negotiating over buying Air Berlin planes, which are still flying following a 150m euro German government loan.

Ryanair said there was an "obvious conspiracy" between Germany, Lufthansa and Air Berlin to carve up the assets.

The German government rejected the accusation and said its support for Air Berlin did not breach anti-trust rules.

Air Berlin filed for bankruptcy on Tuesday, after its biggest shareholder, the Abu Dhabi-based airline Etihad, withdraw its financial support.

Over the past year Air Berlin's passenger numbers have been in freefall. Last month the airline - Germany's second-biggest carrier - lost a quarter of its customers compared with July last year.

'Manufactured insolvency'

Germany's economy minister, Brigitte Zypries, said that a deal whereby Lufthansa took over part of the insolvent airline should be struck in the next few months.

Ryanair said: "This manufactured insolvency is clearly being set up to allow Lufthansa to take over a debt-free Air Berlin which will be in breach of all known German and EU competition rules.

"Now even the German government is supporting this Lufthansa-led monopoly with 150m euros of state aid so that Lufthansa can acquire Air Berlin and drive domestic air fares in Germany even higher than they already are."

A German economy spokeswoman said: "I reject the accusation by Ryanair today that it was a staged insolvency application."

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Ryanair has lodged a complaint with the German regulator, the Bundeskartellamt, and the European Commission.

Lufthansa said it was already in negotiations with Air Berlin to take over parts of the company and was considering hiring more staff: "Lufthansa intends to conclude these negotiations successfully in due time."

Other criticisms

Ryanair has in the past made other criticisms of the relationship between Air Berlin and Lufthansa.

Lufthansa has been operating 38 Air Berlin Airbus jets on its behalf under a "wet lease" arrangement. In January Ryanair chief executive Michael O'Leary described the deal as a "joke".

He told the German magazine WirtschaftsWoche that the deal was "a takeover with the aim of dominating the market. Lufthansa controls the capacities of its most important competitor, sets the prices and decides where aircraft will start. The German authorities are doing nothing".

Lufthansa's interest in Air Berlin has also upset its own staff.

At its Eurowings subsidiary, unions are balloting cabin crew about industrial action after pay talks broke down - something the unions blame on Air Berlin's collapse.

German cabin crew union UFO said: "The reasons why no solution could be worked out with Eurowings management became clear yesterday: the Lufthansa group can obtain cheap aircraft through Air Berlin's insolvency and doesn't need to take on its staff or their wage agreements."

More competition

However, the demise of Air Berlin could open up the German market to more competition.

Ryanair and EasyJet have only managed to get a toehold at airports such as Berlin, Cologne/Bonn, Düsseldorf and Frankfurt.

Gerald Khoo, transport analyst at Liberum Capital, said: "Based on August schedules, Germany currently represents just 9% of EasyJet's capacity and 7% of Ryanair's, compared with 76% of Lufthansa's, highlighting the relative importance of that market to each carrier."

Ryanair has been targeting the German market, with new routes to and from Frankfurt.

Mr Khoo said: "We would expect German airports to move up the list of priorities for next summer for both major low cost carriers, whether or not they attempt to pick up assets and/or staff from Air Berlin's bankruptcy process."

Reuters reported on Tuesday that Easyjet was in talks to buy assets from Air Berlin. EasyJet declined to comment.