Lufthansa is working on bringing part-owned Brussels Airlines into its low-cost airline Eurowings and will decide by the end of August whether to exercise an option to allow a full takeover.
Lufthansa is back on the acquisition trail with a view to expanding Eurowings, with reports that it is also eyeing partnerships or even takeovers of SAS and Condor, the German airline now owned by Thomas Cook Group.
Lufthansa sees Eurowings as a rival to Ryanair and easyJet, which are encroaching on its home market in Germany.
Brussels Airlines is attractive to Lufthansa because of its routes to Africa, where Lufthansa does not offer many flights, and its Brussels hub with passengers from European institutions based there.
Lufthansa owns 45 percent of Brussels Airlines owner SN Airholding, which was created by a group of Belgian business and state investors in 2002 as the successor to collapsed Belgian national airline Sabena. Lufthansa has a call option for the remaining 55 percent of Brussels Airlines.
Lufthansa said it is due to make a decision on whether to exercise the option by the beginning of June, but this deadline has now been extended to the end of August while Brussels Airlines restores operations following the suicide bomb attacks at its hub in March.
“That is a major challenge under the current security provisions, and must now be the priority,” Lufthansa chief executive Carsten Spohr said in a statement.
“And in view of this, we have agreed with Brussels Airlines to give ourselves a further three months to conclude our negotiations on the acquisition terms and devise the migration concept required.”
Lufthansa is due to hold its annual shareholders meeting on Thursday and will report first quarter results next week.
Airwise
The Executive Board of Deutsche Lufthansa is working to bring 45%-owned Brussels Airlines into its low-cost carrier (LCC) Eurowings and will decide by the end of August whether to exercise a call option to allow for a full takeover.
Lufthansa had said it would decide on whether to exercise the option to acquire the remaining 55% of Brussels Airlines’ owner SN Airholding by the beginning of June, but will extend the deadline to the end of August while Brussels Airlines restores operations following the deadly terrorist attacks at Brussels Airport in Zaventem in March.
“Our colleagues at Brussels Airlines are currently devoting all their energies and resources to restoring reliable flight operations for their customers at their home airport following these terrible attacks,” Lufthansa chairman and CEO Carsten Spohr said in a statement.
“That is a major challenge under the current security provisions and must now be the priority. And in view of this, we have agreed with Brussels Airlines to give ourselves a further three months to conclude our negotiations on the acquisition terms and devise the migration concept required,” he said.
Lufthansa established Eurowings in 2015 as a pan-European LCC platform, which it expects to grow quickly to become its second strong brand, especially for point-to-point traffic.
In November 2015, the Lufthansa Group began inviting airlines to join Eurowings as a franchise company to further expand its presence in Europe.
“We are talking with about 20 airlines,” Eurowings chairman Karl Ulrich Garnadt told ATW last week, declining to provide details.
ATW – Air Transport World
Lufthansa to merge Brussels Airlines and Eurowings?
