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Lufthansa cleared to buy stake in Brussels Air

LUFTHANSA AG won the permission of European Union regulators yesterday to take a large stake in Brussels Airlines - but the firm must give up slots at Belgian, German and Swiss airports to eliminate antitrust concerns.

Lufthansa plans to spend 65 million euros (US$90 million) on a 45 percent stake in the holding company that owns the Belgian carrier. The deal - due to close by next Tuesday - gives the German airline the option to take over all of Brussels Airlines in 2011 for no more than 250 million euros.

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 (US$49.28 million) 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 crisis. Brussels Airlines' passenger traffic fell 14 percent in the first four months of this year from 2008 - outpacing a 6 percent drop for all major European airlines.

Lufthansa is also planning to buy the Austrian government's 41.56 percent stake in struggling Austrian Airlines.

It bought 80 percent of BMI British Midland last year, giving it the most slots at Heathrow Airport after British Airways.


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