It looks like Europe will be losing yet another airline tomorrow. In mid-August airberlin filed for insolvency, after Etihad essentially cut them off. In late October airberlin ceased all operations, so it was just over two months from when they filed for insolvency until they went out of business.
Ever since airberlin’s insolvency was announced, airlines have been bidding for their assets, including slots, plane leases, etc. Lufthansa and EasyJet have been planning on taking over many of airberlin’s assets.
One of the interesting aspects of the deal so far is that Niki, an Austrian low cost carrier that is owned by airberlin, has still been flying. The airline hasn’t filed for insolvency, as they’ve been receiving funding from Lufthansa since October, given that Lufthansa was planning on taking them over.
Well, there has been a change in plans. Niki is ending all operations as of tomorrow, Thursday, December 14, 2017. Per an announcement on their website:
The flight operations of NIKI Luftfahrt GmbH under IATA-Airline-Code HG will cease as of December 14th.
Passengers who have booked their flight with a tour operator are kindly asked to contact their tour operator directly. The tour operator is responsible to accommodate his passengers.
Several Airlines are currently looking into solutions for bringing back passengers on standby-basis for a small fee from abroad destinations back to Germany, Austria and Switzerland. To our regret, TUIfly will not participate in this solution.
We would like to thank you for your long-standing loyalty.
What caused this is that the European Commission has said that they won’t approve Lufthansa’s takeover of Niki over concerns of lack of competition. As a result Lufthansa has withdrawn their bid for Niki. Since they’ve singlehandedly been financially supporting Niki, this means the airline is done with.
According to Reuters:
Lufthansa said it had offered to give up take-off and landing slots in order to get the deal approved, but that the European Commission considered that to be insufficient.
“It was clear from the start that Lufthansa and Air Berlin overlap on a very significant number of routes, with clear risks to Austrian, Germans and Swiss consumers and to effective competition,” the Commission said.
While I can appreciate the European Commission trying to ensure competition, I think we can all agree that this decision unfortunately has the opposite effect, as Niki’s fleet of 23 Airbus A321s won’t be flying anymore tomorrow. Now Lufthansa’s plan is to basically replicate Niki’s route network with their Eurowings division. Instead of spending money buying Niki, they’ll instead use that money to grow in Niki’s former markets. Heck, in many ways this is the best case scenario for Lufthansa — they eliminate a competitor and can replicate what they’re doing at a discount.
I feel bad for Niki’s employees, who will be out of jobs as of tomorrow, as well as the tens of thousands of people booked on Niki who will now be stranded (especially leading up to the busy holiday travel season).