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The bankruptcy filing by Air Berlin, Germany’s second-largest carrier, isn’t expected to have an immediate impact on travelers.
But it could be Lufthansa Group that decides what effect the bankruptcy will ultimately have on Air Berlin’s U.S. route network.
Flights continue to operate because the German government extended a bridge loan of 150 million euros to the airline. In the meantime, negotiations are underway between Air Berlin and Lufthansa for the sale of Air Berlin parts.
A third airline is also involved in those discussions, the German government said. Reuters, citing an unnamed source, said that other carrier is the British low-cost carrier EasyJet, but EasyJet has not confirmed the report.
If Air Berlin does end up getting parceled to Lufthansa or other airlines, it would likely be those carriers that decide what becomes of Air Berlin’s current roster of 12 routes to eight U.S. cities.
Air Berlin flies from Dusseldorf to New York, Boston, San Francisco, Los Angeles, Orlando, Miami and Fort Myers, Fla. The carrier also flies from Berlin to New York, Orlando, Miami, San Francisco and Los Angeles.
Analysts are split on whether Lufthansa would be likely to continue those routes should it acquire Air Berlin’s long-haul fleet of Airbus A330s.
“It’s hard to picture that lasting — people flying beyond Dusseldorf from places like Miami,” said Seth Kaplan, managing partner of the newsletter Airline Weekly.
But aviation analysts Bob Mann of R.W. Mann and Co. and AirHelp chief information officer Ashley Raiteri view things differently.
“The low-cost, long-haul strategy is proving to be quite profitable,” Raiteri said.
Both he and Mann said that Lufthansa Group could decide to roll Air Berlin’s U.S. network into Eurowings, its low-cost carrier that started U.S. service in 2016 and this summer is flying from Cologne to Miami, Orlando, Las Vegas and Seattle. The Air Berlin brand likely won’t survive.
Of more immediate concern, Raiteri said that flyers should feel comfortable about purchasing Air Berlin tickets despite the bankruptcy claim.
“They are selling tickets and still operating as normal, and the most likely outcome is Lufthansa will take over the crew, the equipment and the routes,” he said.
Still, Raiteri suggests that travelers take certain precautions in case some or all of Air Berlin’s flight operations are terminated. The best option, he said, is to purchase tickets through a travel agent. Those who buy their tickets directly from Air Berlin would not be entitled to a refund due to the bankruptcy case. However, tickets purchased through a travel agency or through a partner airline are sometimes covered by the seller’s insurance.
Raiteri also suggests using a credit card to purchase Air Berlin tickets. Some cards offer bankruptcy protection, and even those that don’t can probably get a credit for a ticket that isn’t delivered.
In the longer term, the likely collapse of Air Berlin will have ripple effects in the airline and travel industries, analysts say.
Most obviously impacted is Etihad, which owns 29.2% of Air Berlin but decided not to prop up the carrier with more investment — a move that turned out to be the precipitating cause of the bankruptcy filing.
Etihad’s decision keeps with its new strategy of pulling back from a series of airline investments that have wreaked havoc on the Abu Dhabi-based carrier. In May, Alitalia, which was 49% owned by Etihad, went into bankruptcy. In July, Etihad sold its 33% interest in Swiss regional carrier Darwin Airline, which was operating under the name Etihad Regional.
Etihad still owns minority stakes in Air Serbia, Air Seychelles, Virgin Australia, India’s Jet Airways and the leisure carrier Niki.
Mann said that Etihad’s new strategy marks the end of its effort to form what he called, “a quasi-organic network” of partners around the world through investments. With Air Berlin’s demise, he said, the carrier can now focus more on righting its own ship. Etihad lost $1.87 billion in 2016 due to a series of difficulties, including its bad investments and the impact of the declining energy sector.
Another impact of the Air Berlin breakup would be a reduction in competition, Kaplan said. That would especially be for the case for Lufthansa if it secures portions of Air Berlin’s network.
In fact, concerns about that issue led Ryanair to file a complaint with the European Commission, accusing the German government, Air Berlin and Lufthansa of “an obvious” conspiracy to keep competitors away from Air Berlin’s assets.
Meanwhile, an Air Berlin failing would also likely impact Sabre, since Air Berlin uses Sabre’s airline IT product, Sabre Sonic.
Early this month, Sabre announced it would cut its global workforce by approximately 900 employees, in part due to slower projected growth projected in its Airline Solutions business.
Sоurсе: travelweekly.com
