Britain's easyJet expands in Germany with Air Berlin deal

 (Reuters) - EasyJet (EZJ.L) said it agreed to buy part of Air Berlin’s (AB1.DE) operations at Berlin Tegel airport, ending uncertainty over the fate of the failed airline’s remaining assets and strengthening the British carrier’s position in Germany.
EasyJet Commercial passenger aircraft takes off in Colomiers near Toulouse, France, October 19, 2017. REUTERS/Regis Duvignau
EasyJet said on Friday it would enter into leases for up to 25 A320 aircraft for 40 million euros ($46.43 million) and acquire take-off and landing slots, making the announcement shortly after Air Berlin’s final ever flight landed at Tegel.
“This will enable easyJet to operate the leading short haul network at Tegel connecting passengers to and from destinations across Germany and the rest of Europe,” easyJet said in a statement.
The deal will make easyJet, which currently operates only out of Berlin Schoenefeld airport, the leading carrier in the German capital, it said.
Air Berlin was founded nearly 40 years ago and carried around 30 million passengers a year. It was beloved among Germans for its flights to holiday island Mallorca and also for the chocolate hearts it gives out after each flight, but filed for administration in August after years of losses.
Lufthansa had already agreed to take over most of Air Berlin’s operations two weeks ago, while talks had continued with easyJet.
But this week a deal was thrown into doubt, with Condor, owned by Thomas Cook (TCG.L), also being brought into talks with Air Berlin.
EasyJet said it would run a reduced timetable at Tegel during the winter, but would aim for a complete summer schedule in 2018.
The British budget airline added it would look to recruit around 1,000 Air Berlin pilots and cabin crew, on local contracts.
Air Berlin’s (AB1.DE) last flight landed in its home city on Friday night, greeted by a traditional water cannon salute and bringing to an end almost four decades of flying.
Flight AB6210, the last by insolvent carrier Air Berlin, arrives at the Tegel airport in Berlin, Germany, October 27, 2017. REUTERS/Hannibal Hanschke
Air Berlin, beloved among Germans for its flights to holiday island Mallorca and the chocolate hearts it gives out after each flight, filed for administration in August. A government loan kept its planes in the air during negotiations on its carve-up.
Flight AB6210, with the special call sign BER4EVR, departed Munich at 2035 GMT and landed in Berlin Tegel at 2145 after carrying out a farewell tour over the city.
The plane’s arrival at the airport was watched by 1,600 staff and aviation fans from a packed viewing platform in Berlin, while several hundred staff gathered on the apron to welcome the crew and passengers.
“I am happy to be here, but with tears in my eyes,” Sabine, an administrative worker at the airline, who arrived with friends, clutching a large heart, said.
The company has agreed to sell a large part of its airline assets to domestic rival Lufthansa (LHAG.DE), and just after the final flight said it had clinched a deal with Britain’s easyJet (EZJ.L) for some operations at Berlin Tegel.
Others are eyeing the gap left by Air Berlin. IAG (ICAG.L), which owns British Airways, said it saw opportunities for its Vueling budget brand in Germany.
Air Berlin was founded nearly 40 years ago by U.S. pilot Kim Lundgren, taking advantage of the fact that at that time only carriers based in Britain, France or the United States were permitted to fly to Berlin. The first flight took off from Berlin’s Tegel airport for Palma de Mallorca on April 28, 1979.
A plane of the AB6210, the last flight, operated by insolvent carrier Air Berlin taxis to depart Munich's international airport, southern Germany, October 27, 2017. REUTERS/Michael Dalder
After German reunification, entrepreneur Joachim Hunold bought a majority stake in the carrier and in the mid 2000s grew Air Berlin via acquisitions.
But the airline never fully integrated those purchases and the expansion left it laden with debt. The rise of low-cost carriers in Europe, and Lufthansa’s strength in Germany, added to pressure and meant it struggled to turn a profit.
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Since listing on the stock market in 2006, it has racked up losses of around 3 billion euros (2.65 billion pounds), equivalent to an average of around 25 million euros a month.
Financial support from major shareholder Etihad kept it afloat over the last few years, but the Abu Dhabi-based carrier pulled the plug in August, leaving the fate of around 8,000 staff and thousands of customers in the balance.
Captain David McCaleb, who piloted the final flight after 27 years with Air Berlin, said he wanted to keep flying but that, at the age of 60, job offers could be hard to find.
“It’s bittersweet. It’s strange to experience an ending like this,” he told Reuters ahead of the final flight.
With around 30 million passengers a year, Air Berlin was much larger than Britain’s Monarch, which collapsed at the start of this month and had carried 5.7 million in 2015.
Britain's easyJet expands in Germany with Air Berlin deal Britain's easyJet expands in Germany with Air Berlin deal Reviewed by Alexander Von Stern on 00:03:00 Rating: 5