Lufthansa gets EU's green signal to buy Brussels Airlines | india | Hindustan Times
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Lufthansa gets EU's green signal to buy Brussels Airlines

india Updated: Jun 22, 2009 19:09 IST

Lufthansa AG won EU regulators’ permission on Monday to take a large stake in Brussels Airlines, but must give up slots at Belgian, German and Swiss airports to eliminate antitrust concerns.

Lufthansa plans to spend euro 65 million on a 45 per cent stake in the holding company that owns the Belgian carrier. The deal, due to close by the end of June, gives the German airline the option to take over all of Brussels Airlines in 2011 for not more than euro250 million.

The European Commission said Lufthansa had agreed to sell airport slots to other airlines for flights between Brussels airport to Frankfurt, Munich, Hamburg and Zurich to soothe EU concerns that Lufthansa would become the only airline serving these routes.

Slots are the daily periods of time that airlines get to land and take off from airports. They are valuable, changing hands for as much as 30 million pounds a pair at Europe’s busiest airport, London Heathrow.

EU spokesman Jonathan Todd said conditions attached to the slot sale _ such as long-term rights and linking up with other Lufthansa flights and its frequent flyer program _ were “very attractive” and would tempt other airlines to start up new routes.

Airlines are facing a tough year and huge losses as business and leisure travelers stay home during the economic slowdown. Brussels Airlines’ passenger traffic fell 14 per cent in the first four months of this year from 2008 _ outpacing a 6 percent drop for all major European airlines.

Lufthansa has swooped down on several troubled airlines in recent months. It is also planning to buy the Austrian government’s 41.56 per cent stake in the struggling Austrian Airlines.

It bought 80 per cent of BMI British Midland last year, giving it the most total slots at Heathrow after British Airways.
It has also built up an Italian network, Lufthansa Italia and purchased a stake in American carrier JetBlue Airways, adding to other airlines it controls: Swiss International, Italy’s Air Dolomiti, Eurowings, and budget airline Germanwings.

Most of Europe’s airlines are former national flag carriers that run the majority of flights outside of their homeland. That makes combining with other airlines difficult because merging with a rival can make them a monopoly player. The EU blocked Ryanair’s bid for Aer Lingus in 2007 because the company would control most flights out of Dublin.