German lawmaker blasts EU for opposing Niki sale to Lufthansa

FAN Editor
Empty Niki check-in counters are seen at Palma de Mallorca airport
Empty Niki check-in counters are seen at Palma de Mallorca airport, Spain, December 14, 2017. REUTERS/Clara Margais

December 31, 2017

BERLIN (Reuters) – The German government will probably lose a 150 million-euro government-backed loan to insolvent Air Berlin because the European Union opposed Lufthansa’s purchase of Air Berlin’s Austrian unit, Niki, a senior member of Chancellor Angela Merkel’s conservatives said on Sunday.

British Airways owner IAG <ICAG.L> said on Friday that it would buy Niki for 20 million euros and provide additional liquidity to the company of up to 16.5 million euros, closing the final chapter in the demise of Air Berlin . Air Berlin filed for insolvency earlier this year.

“The damages will be borne by creditors and German taxpayers, who will see nothing of the Air Berlin bridging loan in the amount of 150 million euros,” said Hans Michelbach, deputy leader of the Bavarian CSU party in parliament and financial spokesman for the conservative bloc.

The situation would have been different if Lufthansa had been allowed to buy the airline for nearly 200 million euros, Michelbach said. Lufthansa <LHAG.DE> backed out of an agreement to buy Niki after the European Commission indicated it would block the sale .

The German government had also criticized the Commission’s position earlier this month, forecasting that only part of the bridging loan from the KfW bank would be repaid.

The Bavarian lawmaker called for a detailed investigation of the Air Berlin and Niki insolvencies and the actions of the European Commissioner Margrethe Vestager.

He said details that had emerged appeared to show that the EU had carried out secret negotiations and provoked Lufthansa’s withdrawal of its takeover offer for Niki in order to “make possible the takeover by a certain investor at a bargain price.”

“By doing so, the Commission violated its neutrality obligation in the worst sense and acted against the interests of creditors,” he said. No further details were provided.

No comment was immediately available from the Commission. In December, it said Lufthansa’s purchase of Niki would have posed serious risks for European consumers.

Michelbach also called for a detailed examination of whether Niki’s landing rights in Germany could legally be sold to IAG.

IAG plans to make Niki part of its low-cost carrier Vueling, employing 740 of Niki’s 1,000 former employees. Assets include 15 A320 aircraft and slots at airports including Vienna, Dusseldorf, Munich, Palma and Zurich.

Niki filed for insolvency earlier this month after Lufthansa backed out of the deal to buy its assets.

(Reporting by Andrea Shalal, editing by Larry King)

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