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Lufthansa makes new offer in bid for rival
Source: Agencies |
July 18, 2009, Saturday
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LUFTHANSA has made a new offer to try and soothe antitrust concerns over its bid for Austrian Airlines, European Union regulators say.
EU spokesman Jonathan Todd said last week that chances of Lufthansa winning regulatory approval for the deal by July 31 were fading fast because the company was not doing enough to eliminate competition concerns that the deal would reduce choice and hike fares on some routes.
Lufthansa has the right to pull out of the takeover if EU nod doesn't come through by July 31. The EU must decide on approving or blocking the bid by November 6.
In a statement on late Thursday, the European Commission said it would study the offer carefully and could not give details on it.
Todd says the new company could become too powerful on flights from Vienna to Frankfurt, Munich, Stuttgart, Cologne, Zurich, Geneva and Brussels. Lufthansa is Germany's biggest airline and Austrian Airlines dominates routes out of Austria.
Lufthansa last month resolved similar EU fears that its bid for Brussels Airlines would make it the only airline running some routes out of the Belgian capital. Regulators approved the deal after Lufthansa agreed to sell off airport slots to rivals -- a move that would help rivals launch competing services.
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$48 million) a pair at Europe's busiest airport, London Heathrow.
Antitrust officials are separately looking into whether the Austrian government is selling Austrian Airlines at a fair price to Lufthansa. They launched an investigation in February.
Lufthansa plans to pay 366 million euros (US$517.16 million) to buy the Austrian government's 41.56 percent stake in the country's struggling carrier.
EU spokesman Jonathan Todd said last week that chances of Lufthansa winning regulatory approval for the deal by July 31 were fading fast because the company was not doing enough to eliminate competition concerns that the deal would reduce choice and hike fares on some routes.
Lufthansa has the right to pull out of the takeover if EU nod doesn't come through by July 31. The EU must decide on approving or blocking the bid by November 6.
In a statement on late Thursday, the European Commission said it would study the offer carefully and could not give details on it.
Todd says the new company could become too powerful on flights from Vienna to Frankfurt, Munich, Stuttgart, Cologne, Zurich, Geneva and Brussels. Lufthansa is Germany's biggest airline and Austrian Airlines dominates routes out of Austria.
Lufthansa last month resolved similar EU fears that its bid for Brussels Airlines would make it the only airline running some routes out of the Belgian capital. Regulators approved the deal after Lufthansa agreed to sell off airport slots to rivals -- a move that would help rivals launch competing services.
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$48 million) a pair at Europe's busiest airport, London Heathrow.
Antitrust officials are separately looking into whether the Austrian government is selling Austrian Airlines at a fair price to Lufthansa. They launched an investigation in February.
Lufthansa plans to pay 366 million euros (US$517.16 million) to buy the Austrian government's 41.56 percent stake in the country's struggling carrier.
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