Lufthansa Prepares to Buy Parts of Air Berlin in $1.8 Billion Deal

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The German flag carrier Lufthansa said it expected to sign an agreement on Thursday to buy parts of Air Berlin, a low-priced carrier that filed for insolvency this summer.

Air Berlin declared itself insolvent on August 15 after losing financial support from its majority investor, Etihad Airways, and began negotiations with Lufthansa and the United Kingdom's easyJet, which were set to conclude on Thursday.

The operations up for grabs also include access to take-off and landing slots at Air Berlin's hubs in Tegel in the German capital and Duesseldorf.

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The agreement will need a green light from European authorities in a process that could take "several weeks or months", Air Berlin chief executive Thomas Winkelmann said last week.

"Although we are one of the largest aviation companies in the world, our market share is only around three per cent worldwide, and in Europe it is 14 per cent", he told the paper.

Although Air Berlin and Lufthansa's existing low-priced airline, Eurowings, are the only carriers serving routes such as those between Munich and Cologne, Spohr said the combined operation would not boost prices as competition in Europe is set to "intensify".

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Questioned over how Air Berlin ended up where it did, Spohr said the airline had "too high costs and too much debt".

Earlier this week, dpa reported that the airline said in a letter to employees that flights under the airline code AB "according to the current state of things, will no longer be possible after October 28 at the latest". Subsidiaries Niki and LGW should continue as normal.

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