Germany’s Federal Cartel Office approves Air Berlin takeover

Air Berlin PLC and TUI Travel PLC welcome positive decision by the German Federal Cartel Office that allows Air Berlin to take over the city flights network of the Hapag-Lloyd Fluggesellschaft mbH (TUIfly) airline, starting with the 2009/10 winter flight schedule. At the end of March of this year, TUI and Air Berlin signed a corresponding agreement and (originally) a 19.9% cross-shareholding deal between their two airlines was submitted to the German Federal Cartel Office for approval.

However, the cross-holding originally planned will now not be implemented by the two companies. Whether TUI can take a 9.9% stake in Air Berlin PLC or whether a company belonging to the TUI Travel PLC group will pay the sum of EUR 15 million to Air Berlin PLC depends on the outcome of further talks with the German Federal Cartel Office. In recent weeks the cartel authorities in Italy, Austria and Portugal had already agreed to the Air Berlin takeover of TUIfly's inter-city flights. The approval of the Spanish cartel office is still awaited.

Through its takeover of the TUIfly city routes, Air Berlin is strengthening its presence in the Cologne, Stuttgart and Italy markets. The view of Air Berlin CEO Joachim Hunold is clear: "Air Berlin is thus expanding its network of European and domestic German routes, which is extremely important for business customers in particular. At the same time, Air Berlin's position within the challenging economic environment will be enhanced." "Air Berlin's takeover of the TUIfly city route sector enables us, in our German airline business, to concentrate on the remaining touristic flights portfolio. This in turn will place TUIfly on a stable economic footing with a better competitive position within the European air travel market," pointed out Dr. Volker Böttcher, Managing Director Central Europe TUI Travel PLC.