VIENNA (Reuters) – Lufthansa <LHAG.DE> plans to scrap the brand name of Austrian airline Niki as it integrates the carrier into its Eurowings budget business, a board member said on Tuesday.
Lufthansa signed a 210 million euro ($247 million) deal this month to take over insolvent Air Berlin’s <AB1.DE> Niki and LG Walter units, plus some short-haul planes, to cement its position as Germany’s biggest carrier and expand its Eurowings budget brand.
Eurowings aims to sell flights on current Niki routes under its own brand as soon as antitrust proceedings are completed, Eurowings Chief Executive Thorsten Dirks told journalists in Vienna, adding that he hoped for approval by year-end.
Dirks, who is also a Lufthansa board member, said Lufthansa would apply for regulatory clearance at the European Commission early next month.
Austrian competition authorities have said they will voice concerns in Brussels because they believe Lufthansa, which also owns Austrian Airlines, would be too dominant in Vienna if it also owned Niki.
The German cartel office has said it expects the Commission to take a close look and that it would follow the process closely.
Dirks expects the Commission’s approval to be subject to conditions. “This can mean that we will have to return slots or reduce capacity on certain routes,” he said.
Leisure travel airline Niki, which flies 21 A320 family jets and employs 840 staff, will continue operating as an independent unit fulfilling current collective agreements, Dirks said.
He refused to give any details regarding future route planning as it would depend on the European Commission’s conditions.
Air Berlin filed for insolvency in August and is being carved up among several buyers. Family-owned Zeitfracht agreed a deal to buy Air Berlin’s cargo marketing platform Leisure Cargo for an undisclosed price on Tuesday.
With the Air Berlin deal, Eurowings’ workforce will increase to about 10,000 people from 7,000, Lufthansa has said. Eurowings hopes for a revenue boost of more than 1 billion euros.
(Reporting by Kirsti Knolle; Editing by Susan Fenton)