Mixed Responses to Lufthansa Takeover Proposals

The European Commission has approved the takeover of Brussels Airlines by Lufthansa, although the German carrier’s plans to acquire Austrian Airlines have hit a regulatory hurdle. The green light for the Brussels Airlines deal paves the way for Lufthansa to purchase an initial 45% stake in SN Airholding SA/NV, the parent company of the Belgian flag carrier with the option, from 2011, to buy the remaining shareholding once it has secured the necessary traffic rights.
Lufthansa’s plan to take over fellow Star Alliance partner Austrian Airlines Group has run into problems however, after the European Commission (EC) ruled that the initial deal contained insufficient slot concessions on flights between Germany and Austria. The carrier has subsequently revealed that it may be prepared to hand over six of its ten landing slots on the Frankfurt-Vienna route to competitors. The EC was due to make a formal decision on the takeover by the end of July but confirmed earlier in the month that it was unlikely anti-trust clearance would be granted by that date. Austrian Airlines’ Chairman Peter Michaelis revealed at a shareholders’ meeting that the company would require more than €1 billion ($1.4 billion) in new funds if the takeover failed.