Following its takeover of parts of the bankrupt Air Berlin, discount airline Easyjet expands its service in Germany, becoming the first foreign carrier to really challenge Lufthansa domestically.

(Source: dpa) Ready for takeoff.

The takeoff was accompanied by a firetruck water cannon salute and champagne toast, as the first of Easyjet's new domestic flights departed Berlin's Tegel airport. After picking up pieces of Air Berlin, the British discount airline became a real competitor for the German flagship Lufthansa this week.

While Lufthansa bought most of the bankrupt airline, which had been the second-largest in Germany, Easyjet paid €40 million for the remaining parts of Air Berlin. By adding more domestic flights in Germany, Easyjet aims to increase the number of passengers it carries within Europe's biggest economy from 8 million last year to 18 million this year, European boss Thomas Haagensen said Friday morning.

The British carrier wants to have as many as 25 planes based out of Tegel, in addition to the 12 it already has in Berlin's other international airport, Schönefeld. That will make Berlin its second-biggest hub after London Gatwick. Mr. Haagensen said Easyjet will serve 19 destinations from Tegel this winter, including business hot spots such as Vienna, Zürich, Copenhagen and Stockholm, and 40 by the end of the summer.

The ambitious plans represent a challenge not just to Lufthansa, but to European low-cost rival Ryanair. After Air Berlin went down, potential buyers circled the carcass like buzzards. Irish discounter Ryanair, which has focused its own German presence largely on Frankfurt, made accusations that Lufthansa had stitched up a deal to take over Air Berlin. That distraction might have prevented them from getting a piece of the pie like Easyjet did.

There's more competition in Germany again. Lütke Daldrup, CEO of Berlin's airports

Easyjet's investment has been welcomed by Lütke Daldrup, CEO of Berlin's airports. "There's more competition in Germany again," he said. As of Sunday, Easyjet is operating flights between Berlin Tegel and Frankfurt, Stuttgart, Munich and Düsseldorf, routes that Lufthansa and its budget subsidiary Eurowings had long dominated.

The line between market leader and monopolist is thin. The federal cartel office is investigating charges that Lufthansa kept its ticket prices artificially high following Air Berlin's grounding. The German flag carrier said it wasn't pushing prices up but rather used computer programs that automatically adjusted ticket offerings into one of 26 price categories based on demand. Cartel boss Andreas Mundt has said Lufthansa cannot hide behind its software. "These algorithms aren't written in heaven by God," Mr. Mundt said in December.

While ticket prices for some domestic routes rose by as much as 30 percent, a Mydealz report given to Handelsblatt this week showed flight prices have declined dramatically since the New Year, back to levels just under the average when Air Berlin was still operating. After IAG, the parent of Iberia and British Airways, takes over Air Berlin subsidiary Niki, the competition will increase even more on some routes. Deutsche Bahn is even getting in the mix: A new high-speed train route promises to get passengers from Berlin to Munich in less than four hours.

Not that Lufthansa is resting on its laurels. The airline's next destination could be a takeover of the bankrupt Alitalia. CEO Carsten Spohr has long eyed the Italian market, and an insider reports that the company's failed purchase of Air Berlin's Austrian subsidiary Niki, which was rejected by regulators, has left the management team with spare capacity.

Handelsblatt reporter Jens Koenen, DPA and Reuters contributed to this article. To contact the author: [email protected].