Germany’s competition regulator has given the green light for Lufthansa's plan to wet-lease 38 Airbus A320-family jets from Air Berlin.

In 2016, two airlines revealed a plan to transfer a total of 33 A320s and A319s to Lufthansa’s budget arm Eurowings, and another five A320s to group subsidiary Austrian Airlines from this year as part of Air Berlin's restructuring.

The Bundeskartellamt says the case involved "complex legal questions and raised issues that required clarification”, and notes that several competitors of Lufthansa submitted comments opposing the wet-lease agreement.

Ryanair commercial chief David O'Brien argued earlier this month that the pact will “block the market” and that the budget carrier will challenge the deal on grounds that it may breach EU competition rules.

The Bundeskartellamt admits that the wet-lease deal “naturally” enables Lufthansa’s to expand its business. But the federal authority concludes that Lufthansa’s “potential expansion is not sufficient to justify a prohibition of the agreement".

"The lease of aircraft from a competitor needs to be assessed differently than the takeover of the competitor itself," it argues.

The regulator’s president Andreas Mundt says: “The agreement… does not relate to the routes served by the two air carriers. Lufthansa will not take over any of Air Berlin's slots. Nor will the lease of the aircraft affect the re-allocation of slots that have so far been used by Air Berlin.”

As part of an evaluation of extensive market data and talks with a large number of market players, the authority asserts that a “majority of customers and travel agents questioned… did not express any serious competition concerns”.

However, the regulator adds that “on account of the results of the competition assessment, it could be left open whether the wet-lease agreement does in fact constitute a merger within the meaning of the German competition law.”

Air Berlin and Lufthansa agreed the deal with an initial term of six years.

A separate agreement between Air Berlin, its shareholder Etihad Airways and tour operator TUI to establish a new leisure carrier on the basis of Austrian-based Niki and TuiFly was not covered by the Bundeskartellamt’s probe.

Source: Cirium Dashboard