EasyJet Beefs Up German Presence With £35m Air Berlin Deal

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by Bradley Gerrard, The Telegraph, October 31, 2017

Low-cost carrier easyJet has gained a dominant position in Berlin after securing a €40m (£35.3m) deal to acquire part of Air Berlin’s operations at the German capital’s Tegel airport.

The orange-liveried airline will lease up to 25 A320 aircraft and the requisite take-off and landing slots from its stricken German rival, which fell into administration in August after its backer Etihad refused to continue to fund its operations having injected €250m just four months before its collapse.

EasyJet said the deal was subject to regulatory approval but was likely to be confirmed in December, which will come as a relief to roughly 1,000 Air Berlin pilots and crew whose jobs will be saved by the deal.

The workers will be employed on German contracts under collective labour agreements negotiated with German trade union Verdi.

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EasyJet said the deal would mean it operating the leading short-haul network at Tegel, which sits in the north-west of the city. The company said it would fly intra-German routes as well as European-wide ones too meaning it would be the leading airline in Berlin thanks to its existing operations at the city’s Schönefeld airport.

While its timetable for flights immediately after the deal completes in December will be a reduced one, easyJet said it would operate a full schedule from summer next year.

Liberum transport analyst Gerald Khoo said the deal, which adds roughly 9pc to easyJet's existing fleet of aircraft, was sensible.

"The move to reinforce its Berlin operations is consistent with easyJet’s city-focussed strategy, aiming to be within the top two airlines in its chosen markets and concentrating on airports where slot constraints act as a barrier to entry," he said.

The deal will be a blow for rival Ryanair, which decided not to bid for parts of Air Berlin because of what it claimed was a "stitch up" due to its view the process was not transparent and would undoubtedly lead to German airline Lufthansa succeeding in its bid for parts of its low-cost rival.

The Irish carrier also withdrew its interest in Alitalia after an error with its pilot rota meant it had to cancel 2,100 flights during September and October. The mistake arose as it had to fit all of its pilots’ holiday allowance within a nine-month period to enable its holiday year to mimic the calendar rather than the financial year, due to new regulations.

Ryanair then cancelled a further 18,000 flights for the winter season, affecting 400,000 bookings.

 

This article was written by Bradley Gerrard from The Telegraph and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].

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