Competitors have forced the German carrier to reconsider buying airlines it had already rejected.
Alitalia flying away from Lufthansa.
German flagship airline Deutsche Lufthansa continues to taxi into a handful of auctions for European carriers in hopes of expanding its reach and fleet, and to keep rivals out.
The company has rekindled talks about an investment in ailing Italian airline Alitalia and has made informal overtures to Norwegian, the discount Scandinavian airline. And, analysts say, Hungary’s Wizz has made itself attractive to the Frankfurt-based airline by snapping up bankrupt UK flyer Monarch and establishing routes to Luton, near London.
“Our task at Lufthansa is to ensure that the company is fit enough to play in the league of global Champions League players,” CEO Carsten Spohr said at an industry event in November. The Champions League is an annual competition among Europe’s best professional soccer teams.
Europe’s air-travel market has been consolidating for over a decade with Lufthansa a major player. The German company has bought up Belgian, Austrian and Swiss rivals as well as bankrupt Air Berlin, a domestic competitor. It also launched Eurowings, its own discount unit, to take on downmarket challengers.
The airline bowed out of the bidding for Alitalia last year but rediscovered its interest earlier this month amid a report in Italy’s Il Sole 24 Ore newspaper that US rival Delta had linked up with Air France/KLM to bid. Italy’s national railway has been tasked with keeping Alitalia aloft and has reportedly met with not only the Delta venture but also Easyjet and now Lufthansa.
The boom times are over for European airlines due to rising costs, slowing demand for tickets and management mistakes, say aviation experts.
It has to report to the Italian government late this month on its plans for a new investor.
Delta and its partners would be willing to take a minority holding in Alitalia alongside the Italian government and the railway, likely making them the preferred partner. Lufthansa has said it has no interest in co-investing with the Italian government because it would then have to wrestle over the necessary cuts.
The German airline also re-dipped its toe in talks for Norwegian in case it was capable of bumping rival IAG, which includes British Airways, out of the bidding. Although IAG on Thursday said it was no longer interested in Norwegian, Lufthansa sources say the move, which hammered Norwegian’s shares, was just a strategic ploy to pressure Norwegian CEO Bjørn Kjos into signing a deal.
Norwegian’s fleet of short- and mid-range planes would complement Lufthansa’s broad fleet.
Jens Koenen leads Handelsblatt’s coverage of the aviation and space industry and writes about IT companies. Andrew Bulkeley, an editor at Handelsblatt Today, adapted this article into English. To contact the author: [email protected]
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