LTU330 wrote:

.....and don't forget the cost to the German Government to repatriate the many thousands of Passengers who would have been stranded. Look at the cost of the repatriation for Monarch Passengers in the UK.

Yup.

Plus this isn't really significant, LH has a 49% marketshare in and out of Germany. Air Berlin had 14%, on which much was flying for Lufthansa, since all German airlines combined had a markets are of just 56.5% in 1Q2017. So, net increase, if they kept it all flying, which they won't, inkluding Nikki, is just about 7%, competition wise that is not so significant.

Best regards
Thomas

PanHAM wrote:

The routes are available to everyone. There is no Monopoly in European aviation, as others have already pointed out.

Well yes anyone can operate any route. But do they have access to viable slots to be able to compete sufficiently? What if someone wanted to operate TXL-FRA or HAM-MUC but only had access to slots at useless times? So not necessarily a level playing field.

HHScot wrote:

PanHAM wrote:

The routes are available to everyone. There is no Monopoly in European aviation, as others have already pointed out.

Well yes anyone can operate any route. But do they have access to viable slots to be able to compete sufficiently? What if someone wanted to operate TXL-FRA or HAM-MUC but only had access to slots at useless times? So not necessarily a level playing field.

Do they get slots as they wish at CDG or LHR so they can operate routes in the UK and France as they wish?

Unlikely. But I don't get your point here that you're trying to make.

All I'm saying is that aviation isn't like any other business in that there are massive barriers to entry. Its not so easy to enter a market. Nobody can easily start up operating on an existing route and compete effectively. That goes for US or FR trying to start up HAM-MUC as much as LH trying CDG-MRS.

HHScot wrote:

That goes for US or FR trying to start up HAM-MUC as much as LH trying CDG-MRS.

Well, if operating DUS/TXL-MUC, DUS-HAM and the like would be so interesting to fly, any competitor just needed to cough up more money than LH did and voilà, you have your intra-German network, slots, aircrafts, crews and all.
This was a simple economic decision: LH considered limiting competition in Germany to be worth 1.7 billion EUR, 200 Mil in purchase price and 1.5 billion in investment. They have been flying against a competitor consistently dumping tickets well under cost for long enough. The investment part is irrelevant to the sale, as the shareholders hardly care how much money is being invested into the business they have just sold.
Obviously no competitor considered entering the German market even worth 200 million EUR. A 30+ Billion EUR turnover company makes a purchase with a whole whopping value of 200 million, or 0.7% of the turnover. This is as close to irrelevant as a business transaction can be.

Best regards
Thomas

KarelXWB wrote:

Revelation wrote:

All this facilitated by a quasi-government loan that prevented the slots from ever seeing the open market.

Without the loan, Air Berlin would have collapsed immediately and 8,000 people would have lost their job. I cannot imagine anyone preferring that scenario.

True if you believe that ~14% of the Germain air market is also redundant. Otherwise those people find new jobs pretty quickly.

In this thread we're told the market will combat LH's effective monopoly pricing power, but at the same time we're told that it's OK for LH to gobble up all the resources needed to combat its effective monopoly power.

The price being paid for a free airplane ticket home for those who bought tickets from a failing airline and a smooth job transition for many who have been working for a failing airline is handing off even more pricing power to national champion LH.

PanHAM wrote:

I didn't know that Memmingen is Slot restricted. They must be powered by Baerenmarke

Memmingen is as close to somewhere people want to fly as Hahn is which is why NO airlines have any great interest in it. You are not even trying to approach the topic honestly.

PanHAM wrote:

Whatever, FR is not interested in domestic German Services at all, mainly for Crew pay issues. If they don't Change their attitude they will have a lot of Problems, not only in Germany. The rules for self-employment are very strict and Irish law does not apply for Crew based in Germany..

Ryanair's only interest is profit. They don't follow any dogma which would run against their best financial interests and this has been shown time and time again. You focus on Ryanair when making that point but there are dozens of other airlines who don't have that issue. Once again you are being disingenuous and trying to construct arguments to deny what has happened has actually happened which is that the Liquidators and the German Government delivered hugely profitable routes competition free to Lufthansa on a silver platter.

Revelation wrote:

The price being paid for a free airplane ticket home for those who bought tickets from a failing airline and a smooth job transition for many who have been working for a failing airline is handing off even more pricing power to national champion LH.

We have this thing called "high speed rail" here, that is very competitive in the intra German market.
Starting this winter, Berlin - Munich for example shrinks to less than 4 hours, effectively killing that as a non-transit airline destination.

It wasn't AB that kept LH prices down in Germany, it was the Rail system, it wasn't AB that kept LH prices down in ex-Germany flying, that has been done by the US3, ME3, EULCC3, IAG and FRKL.

Best regards
Thomas

tommy1808 wrote:

Revelation wrote:

The price being paid for a free airplane ticket home for those who bought tickets from a failing airline and a smooth job transition for many who have been working for a failing airline is handing off even more pricing power to national champion LH.

We have this thing called "high speed rail" here, that is very competitive in the intra German market.
Starting this winter, Berlin - Munich for example shrinks to less than 4 hours, effectively killing that as a non-transit airline destination.

It wasn't AB that kept LH prices down in Germany, it was the Rail system, it wasn't AB that kept LH prices down in ex-Germany flying, that has been done by the US3, ME3, EULCC3, IAG and FRKL.

Best regards
Thomas

Yeah, how well did that work last week in northern German or to Basel over the last two months.

leghorn wrote:

tommy1808 wrote:

Revelation wrote:

The price being paid for a free airplane ticket home for those who bought tickets from a failing airline and a smooth job transition for many who have been working for a failing airline is handing off even more pricing power to national champion LH.

We have this thing called "high speed rail" here, that is very competitive in the intra German market.
Starting this winter, Berlin - Munich for example shrinks to less than 4 hours, effectively killing that as a non-transit airline destination.

It wasn't AB that kept LH prices down in Germany, it was the Rail system, it wasn't AB that kept LH prices down in ex-Germany flying, that has been done by the US3, ME3, EULCC3, IAG and FRKL.

Best regards
Thomas

Yeah, how well did that work last week in northern German or to Basel over the last two months.

Well, one was caused by the weather, the other by (I think) planned track and tunnel work. Anyway, if you go down that route, the weather also affected many flights, as did the French ATC strike (I had a big delay from Spain to Germany on Tuesday) and look at the past, things like Volcanic ash disaster and Airport Handling agency strikes etc. The real reason the train is not competitive is because it is in general a big mess all the time. Massive delays and termination of services are now routine. That’s not the Airlines fault though.

LTU330 wrote:

Well, one was caused by the weather, the other by (I think) planned track and tunnel work. Anyway, if you go down that route, the weather also affected many flights, as did the French ATC strike (I had a big delay from Spain to Germany on Tuesday) and look at the past, things like Volcanic ash disaster and Airport Handling agency strikes etc. The real reason the train is not competitive is because it is in general a big mess all the time. Massive delays and termination of services are now routine. That’s not the Airlines fault though.

Not planned maintenance and French ATC doesn't control German airspace.

HHScot wrote:

Unlikely. But I don't get your point here that you're trying to make.

All I'm saying is that aviation isn't like any other business in that there are massive barriers to entry. Its not so easy to enter a market. Nobody can easily start up operating on an existing route and compete effectively. That goes for US or FR trying to start up HAM-MUC as much as LH trying CDG-MRS.

The point is that on any busy airport with not many or no free slots remaining, entering the market is difficult and a new competitor is not handed over taken slots on a tablet anywhere. The fall of AB was the chance to get slots at DUS and TXL, but FR did not even bid, so they thought it not even worth the effort to raise the price LH would have to pay. So for any airport but MUC they would have had the option to start a viable network in Germany. Same goes for IAG, AF/KLM and any other bidder.

I do really not get the crocodile tears for the poor FR; because in the end they wanted AB to die like Monarch, so that they would not only get the slots for free, but could probably also get a discount at the airports which have lost traffic otherwise. I hope U2 do get enough slots to pressure LH and DE should also get the chance to put LH under pressure on warm water routes, but I have no sympathy for the crocodile tears shed by FR.

Just some thoughts.

After the new landing runway opened at FRA, they haven't yet reached the technical limit. The combined capacity of hourly take-offs and landings has now risen from 81 to 104 and it will further rise during the coming years. That's why Ryanair had been able to enter the market because according to IATA rules 50% of available slots are resered for new entrants. At the other side, Lufthansa has been down-sizing some planes (i.e. 380s) in order to secure as many slots as possible (out of the other half IATA rules reserve for currant operators).

Domestic operations within EU countries aren't attractive at all, from the airlines' perspective: they are subject to an expensive VAT. Everything like fuel, ticket sales etc. is subject to that tax, while cross-border international flights are not.

I agree with everyone who doesn't dramatize the recent blow-up of Lufthansa's strength. It will not have any direct
affect on Average Joe because he can always easily avoid that company. There are plenty of attractive alternatives. However, certain hectical business travelers with time-critical schedules might feel some pain.

Austrian "Bundeswettbewerbsbehörde" will have a close look at the LH-AB deal (german though):

https://kurier.at/wirtschaft/lufthansa- ... 91.643.175

Latest from amp news is that u2 is now negotiating for 25 a/c all at tegel . But no deal has been finalised

leghorn wrote:

PanHAM wrote:

I didn't know that Memmingen is Slot restricted. They must be powered by Baerenmark Once again you are being disingenuous and trying to construct arguments to deny what has happened has actually happened which is that the Liquidators and the German Government delivered hugely profitable routes competition free to Lufthansa on a silver platter.

This is utter BS. You are constructing a scenario which is not supported by facts. Germany has an insolvency law which has to be followed by all participants. If anyone presented routes on a silver plate, it was the UAE government. The LH board has just made their Job, anything else would have been "Untreue". Besides, this discussion is premature since US and the administratorrs of AN are stilll in talks. The best that can happen is, that U2 takes over planes, Slots and routes to maintain the present Situation and compete with LH on the domestic trunk routes.
But, let's assume a Situation in which neither U2 nor any other potential competitor (we have learned in this discussion that FR is not interested at all) will take over the leftovers from AB, what will happen then? That would be a Scenario which would not be under LHs control. No government agency can force a market Player to enter a committment he does not want. Wouldn't it be a fair solution to accept that the AB routes could go to EW? After all, EW may have a different yield Management and pricing System for the classic Airline and the Discounter.
Hotels have different products, why not Airlines? That's thinking outside of the box, Mr. GenIous, what's your opinion?

leghorn wrote:

LTU330 wrote:

Well, one was caused by the weather, the other by (I think) planned track and tunnel work. Anyway, if you go down that route, the weather also affected many flights, as did the French ATC strike (I had a big delay from Spain to Germany on Tuesday) and look at the past, things like Volcanic ash disaster and Airport Handling agency strikes etc. The real reason the train is not competitive is because it is in general a big mess all the time. Massive delays and termination of services are now routine. That’s not the Airlines fault though.

Not planned maintenance and French ATC doesn't control German airspace.

Sorry, I didn’t realize it was not planned maintenance. Neither was the volcano eruption. Yes, the French ATC does not impact intra German routes but it certainly impacted the Airlines on a big scale. It seems to me that the biggest issue most of the complainers have is that prices will go up. Show some humanity and think about the people losing their jobs, because at the end of the day if the likes of Ryanair don’t want to fly intra German then you won’t get cheap flights, and they can only offer cheap flights because they circumnavigate reasonable employment contracts and press Airports to offer better deals than any other Airline gets. Air Berlin was a basket case and people can bang on about the fact it should have been allowed to die years ago, but the hard working and loyal staff don’t deserve to take any blame in the end and people moaning on about monopolies and such like should take a look at other industries as well. What percentage of German rail does DB operate ? Rail has paths that are the same as slots. I bet that around 80 percent of the passenger train paths in Germany are controlled by DB. And I stand by my comment about Rail. It could compete quite well because it gets you into the heart of the cities, but the biggest rail operator has big trouble keeping to timetables even when the weather is ok and the routes are free of mole work. People can’t truly compare Rail vs Plane with regard to the time it takes unless they include getting to the airport, bag drop (if required), security line, at gate 30 minutes before departure, get off, queue to buy an s-Bahn ticket or whatever, get on the s-Bahn and get in to the city. That can quite easily add a few hours to any journey. When I worked in the UK I used to live 20 miles from MAN but work at LHR. It was less time to drive to LHR than get the 35 minute flight from MAN to LHR when everything was taken in to account, and if you needed to get in to the center of London, the train was the fastest option. Ok, Germany has some bigger distances between major cities, but still, for people that don’t want to pay LH prices, there is Rail and Bus available,cheaper but takes longer. Private Companies will try to make as much money as possible and they will charge what people are prepared to pay. If LH find that their flights are empty between HAM and MUC because the price puts people off, they will either reduce the prices or stop flying the route. Supply and demand.

The usual suspects will try to talk those who speak plain truth down as they are partizan and wish to see Lufthansa extort the flying passengers in Germany.

I go in to google flights and select a random return flight on the same date between London and Edinburgh and between Berlin and Munich.
€53 in the market where LCCs have access and in Germany where Lufthansa rule the skies it is €155.

Now, tell me again how this is good for the Customer.

Facts are hard for Panham to deal with. Facts are that air-travel intra Germany is prohibitively expensive due to the dominant position of Lufthansa.

Any disinterested party who wants to form an opinion then just go to your flight search engine of choice and you can confirm it for yourself. Select city pairs within countries at random times 3 weeks or more from date of travel and see what results you get.

I'm glad to have given extremely biased posters who push their own agenda the opportunity the opportunity to expose themselves. It helps so that others can understand their agenda where their agenda is pushed more subtly.

leghorn wrote:

The usual suspects will try to talk those who speak plain truth down as they are partizan and wish to see Lufthansa extort the flying passengers in Germany.

I go in to google flights and select a random return flight on the same date between London and Edinburgh and between Berlin and Munich.
€53 in the market where LCCs have access and in Germany where Lufthansa rule the skies it is €155.

Now, tell me again how this is good for the Customer.

Facts are hard for Panham to deal with. Facts are that air-travel intra Germany is prohibitively expensive due to the dominant position of Lufthansa.

Any disinterested party who wants to form an opinion then just go to your flight search engine of choice and you can confirm it for yourself. Select city pairs within countries at random times 3 weeks or more from date of travel and see what results you get.

I'm glad to have given extremely biased posters who push their own agenda the opportunity the opportunity to expose themselves. It helps so that others can understand their agenda where their agenda is pushed more subtly.

At the same time you underline the fact that you are biased the same way AGAINST this takeover and how it will affect badly the customer. As far as I can see, you are basing your facts mainly on the prices; however, 53EUR fares for return flights are not the scale airlines earn money and make profits. None of the mentioned companies are state-owned, they have their own shareholders and company strategies to follow. Nobody will offer you free flights in this world, but pushing the yields down so extreme have led to forced consolidations - simple as that. You may like it or not, LH did the best in their own financial interest and does care about customer wishes as much as other airlines would do in the same position.
Btw. you try to make your point by giving us two search engine results of two totally different markets. It's like comparing bananas and apples. Simply necleting so many other factors just shows how fragile the base is of your very example.

leghorn wrote:

I go in to google flights and select a random return flight on the same date between London and Edinburgh and between Berlin and Munich.
€53 in the market where LCCs have access and in Germany where Lufthansa rule the skies it is €155.

using https://flug.check24.de

I get numbers in the same ballpark for both relations.

Nobody can deny that the development is bad for the customer, however any party was free to overbid LH for the AB ops.

seahawk wrote:

Nobody can deny that the development is bad for the customer, however any party was free to overbid LH for the AB ops.

Short term yes, medium to long term other carriers have the possibility to open up new domestic routes. I know airports like DUS are having issues with free slots, but in this very special case I do expect that a combined EW/AB has to give up slots anyway. AB was weak in FRA, but better in MUC and here I agree that we can expect higher tickets. I have my doubts of seeing any LCC's running domestic flights in and out of MUC and FRA with EW being a special exception. For the other airports I would expect other operators to step in.

seahawk wrote:

Nobody can deny that the development is bad for the customer, however any party was free to overbid LH for the AB ops.

You are just scratching the surface of that ecology. ( and imho you are wrong.)

All the cheap offers had/have some major integral downfall implanted.

Air Berlin for a long time never achieved sufficient income to balance their cost side.
pushed from various interests AB was purposed as a lossy wedge into the EU/German market.

Ryan Air as an airline shows profits due to the problematic Irish tax model
and having their crews double up as their own slave holders.

These entities do not make economic sense for the host societies they exist in.

WIederling wrote:

leghorn wrote:

I go in to google flights and select a random return flight on the same date between London and Edinburgh and between Berlin and Munich.
€53 in the market where LCCs have access and in Germany where Lufthansa rule the skies it is €155.

using https://flug.check24.de

I get numbers in the same ballpark for both relations.

Prove it. My dates were mid week, early to mid november.

stylo777 wrote:

. As far as I can see, you are basing your facts mainly on the prices; however, 53EUR fares for return flights are not the scale airlines earn money and make profits.

Low Cost Carriers can and do make very healthy profits on sub-100 euro fares.
It seems you would prefer a situation where flight remains a preserve of only the wealthy or for the poor to be further impoverished if they need to travel by air.
The 21st century equivalent of "let them eat cake" will be "they can take flixbus".

leghorn wrote:

Prove it. My dates were mid week, early to mid november.

you made the rather contentious allegation, didn't you?
( you also have to look into ancillary cost like VAT or not, "Flugticketsteuer" and airport/ATC fees. )

What was iag offer one must assume it was less than luft group ?

No, my figures are all in costs. Avoid Guy Fawkes and see if you can get similar flight prices mid week for UK and Germany.

So which did you try Edinburgh - LHR?

If you use all London Airports it becomes impossible to compare considering the much large amount of available slots for all London Airports. And if you use all London Airports you could use Memmingen as well.

You guys cling to Memmingen like a comfort blanket. It is 117km from Muenchen Zentrum. I suppose the great unwashed should be forced to endure a long-distance bus trip even if they fly.

leghorn wrote:

.

Give it a rest. I've gone through all threads and all you're trying to do here is to bash LH whatever you can. If you hate then, don't fly them. Simple.

What bothered you so much? It's not like the doomsday when LH acquired majority of AB. Too many choices within Europe, and you can even drive via Autobahn if you wish to. Not to mention the planned speed increase, which if you follow any HSRs and the impact market, you will know that airlines will suffer greatly.

Also, why I didn't see you bashing any of the MEB3, IAG, AFKL, etc. when they're merging/acquiring smaller companies? Why target only on LH and not those with a potentially much higher effect on the market? Why not talk about UA's position at NYC and IAH, AA's position at PHL/CLT/DFW/MIA, DL's position at MSP/DTW/SEA, BA's position at LHR, etc.?

Please use some facts when bashing LH. All you're doing here is getting annoying and getting the thread off-track.

Michael

It is about the capacity available. London has 4-5 suitable airports, MUC has one. So the number of possible flights at MUC will be lower, the number of available seats will be lower and with that the price will be higher. But you are absolutely correct that the flight in Germany is 50% more expensive and that is due to missing competition on the route.

No. It is dawning on me now...there is a snobbery here amongst a subset of the posters on the forum. LCCs should know their place in the order of things. Main international airports are off-limits to them. They are allowed to subsist on the crumbs from the remote airports but they have no right to be establishing themselves in the main airports of the larger cities because that is where the proper airlines operate and the less wealthy air passengers can endure the indignity of a bus ride to a remote airport if they wish to fly somewhere.
LCCs are dangerous because if they infest the main airports they will undermine the Airlines which have a snob-value to this subset of posters and therefore they should be fought by all means fair and foul. anti-competitive? screw that. the LCCs threaten what I hold dear. grind them in to the dirt.
Facts such as Lufthansa having an un-parralleled unassailable dominant position in a specific market, a market which is easiest the wealthiest in Europe and perhaps the western world are easily forgotten as proved by posts such as the one from Michael just above with a little bit of don't look here, look over there thrown in as sauce.

I apologize, I’ve been reading this thread but I don’t understand some of how this works in Europe. Does this mean that LH will fly the long haul routes out of Berlin? I saw that they acquired 80 planes or so, and I understand what is being discussed regarding the intro-German flying but I’m less clear on the long haul presence in Berlin moving forward.

There will be no long-haul from TXL on former AB routes by Lufthansa group other than a New York flight operated by Lufthansa mainline with an A330 freed up at FRA, as I understand, by reduction to some ME destinations. At DUS, some AB routes will be continued by Eurowings with a mixture of leased A330-200/340-300 and 767-300. The aircraft taken over by Lufthansa do not involve AB's long-haul fleet, these are just A32X and Q400 plus the leases of seven 737-800s. AB's 17 A330-200 are returned to the lessors and some have already found new operators (Malaysian, IIRC).

f4f3a wrote:

Latest from amp news is that u2 is now negotiating for 25 a/c all at tegel . But no deal has been finalised

That's interesting as it would mean no (based) operation at DUS airport from where AB operated important routes to destinations such as MUC, HAM, ZRH, VIE, MIL, FCO. Quite surprising as DUS is one of the most slot-constrianed airports in Europe and slots otherwise hard to come by would be served on a silver platter. Whereas operating from TXL would mean head-to-head competition with Ryanair once airline operations at TXL and SXF are consolidated at BER (whenever that will be, we currently hear 2019).

these routes could easily be operated by w patterns from txl via dus . U2 has done this elsewhere without having a base there.

Bursting at the seams does not necessarily mean it is (runway) capacity-constrained (i.e. slot-constrained). There is only a handful of airports in Europe that are technically slot-constrained.

leghorn wrote:

No. It is dawning on me now...there is a snobbery here amongst a subset of the posters on the forum. LCCs should know their place in the order of things. Main international airports are off-limits to them. They are allowed to subsist on the crumbs from the remote airports but they have no right to be establishing themselves in the main airports of the larger cities because that is where the proper airlines operate and the less wealthy air passengers can endure the indignity of a bus ride to a remote airport if they wish to fly somewhere.
LCCs are dangerous because if they infest the main airports they will undermine the Airlines which have a snob-value to this subset of posters and therefore they should be fought by all means fair and foul. anti-competitive? screw that. the LCCs threaten what I hold dear. grind them in to the dirt.
Facts such as Lufthansa having an un-parralleled unassailable dominant position in a specific market, a market which is easiest the wealthiest in Europe and perhaps the western world are easily forgotten as proved by posts such as the one from Michael just above with a little bit of don't look here, look over there thrown in as sauce.

In the view that RyanAir has established itself at FRA and no huffing and puffing by LH could stop that, I can hardly understand your rant. RyanAir unwelcome in LBC went to HAM. They are in DTM, SXF, CGN and NUE, fly to MUC and STR and I am sure more German airports if one starts to look at it.. What the hell should stop them from flying any inner German route if they see a potential profit? The last thing RyanAir would need is staff and airplanes from AB, far to expensive.
There are other LCC and not LLC airlines around, the only reason for going into a market is them making money, so if you do not see them somewhere, it is because they decided it would not be worth it.

SQ22 wrote:

seahawk wrote:

Nobody can deny that the development is bad for the customer, however any party was free to overbid LH for the AB ops.

Short term yes, medium to long term other carriers have the possibility to open up new domestic routes.

But in the medium term those other carriers are now facing a LH Group that has just increased its market share by ~14% and added another EUR 70M - 90M to its annual profits. That's very daunting for a new carrier to compete against. We have also seen the local government is very supportive of their national champion, to the point of making the key loan keeping AB afloat so LH could have their pick of assets.

We read posts here about the good news that some people who bought flights on a financially distressed airline got free flights home and others who work for a financially distressed airline do not have to endure a job search and possible unemployment but they totally ignore the longer term issue that one of the very few opportunities to add meaningful domestic competition to LH Group has just passed. In fact it looks as if one of the few competitors is going to be partially absorbed and partially disbanded all to the good of the national champion LH Group. It's clearly a case of the rich getting richer, with the handy political slush fund bank greasing the skids. In the end it'll all be paid back by lack of competition and thus high fares.

I invite everybody to go on FR24, filter for LH, U2 and FR!
You will see who dominates the skies of Europe. So enough with this bias and BS. There are more than enough alternatives to get from A to B and yes, even in Germany!
As in other industries, you always have corporations buying others. You have dominant players and even monopolies/duopolies.
Whats your mobilephone brand? Which type of aircraft have you been on the most? What is the name of the company producing your med's against headache?

Revelation wrote:

SQ22 wrote:

seahawk wrote:

Nobody can deny that the development is bad for the customer, however any party was free to overbid LH for the AB ops.

Short term yes, medium to long term other carriers have the possibility to open up new domestic routes.

But in the medium term those other carriers are now facing a LH Group that has just increased its market share by ~14% and added another EUR 70M - 90M to its annual profits. That's very daunting for a new carrier to compete against. We have also seen the local government is very supportive of their national champion, to the point of making the key loan keeping AB afloat so LH could have their pick of assets.

We read posts here about the good news that some people who bought flights on a financially distressed airline got free flights home and others who work for a financially distressed airline do not have to endure a job search and possible unemployment but they totally ignore the longer term issue that one of the very few opportunities to add meaningful domestic competition to LH Group has just passed. In fact it looks as if one of the few competitors is going to be partially absorbed and partially disbanded all to the good of the national champion LH Group. It's clearly a case of the rich getting richer, with the handy political slush fund bank greasing the skids. In the end it'll all be paid back by lack of competition and thus high fares.

What do you mean “to the point of making the key loan” ? As in, doing what can legally be performed in an insolvency, thereby preventing thousands and thousands of passengers from being stranded as far away as Los Angeles, which would have to be repatriated at a cost to Germany far greater than any “loan”, which by the way is paid back with interest. I am no fan of LH, but if you want to look at “unfair situations” talk about Alitalia and such like.

LTU330 wrote:

What do you mean “to the point of making the key loan” ? As in, doing what can legally be performed in an insolvency, thereby preventing thousands and thousands of passengers from being stranded as far away as Los Angeles, which would have to be repatriated at a cost to Germany far greater than any “loan”, which by the way is paid back with interest. I am no fan of LH, but if you want to look at “unfair situations” talk about Alitalia and such like.

My main point is that the emphasis is on applying remedies for short term issues like getting passengers home and transitioning employees to new jobs and no attention is paid to the longer term issue regarding competition.

The choice to potentially get stranded in far away places is made by the passengers who bought tickets from a financially distressed airline and did not chose to buy travel insurance against such an outcome. In this case they don't buy the insurance because the government has chosen to provide such insurance for free. Given this deliberate choice, it'd be more sensible to see what we saw in the Monach case: the insurance is explicitly provided by the government via ticket fees and charter aircraft are used to rescue the passengers. Instead we see emergency loans from a dodgy political slush fund bank that end up distorting the market.

Revelation wrote:

to the point of making the key loan keeping AB afloat so LH could have their pick of assets.

With EU approval, so clearly that is only in your head.

that one of the very few opportunities to add meaningful domestic competition to LH Group has just passed.

The meaningful, ticket below cost dumping, competition has just gone belly up.

You economic analysis is wrong, with LH and AB working the German market, and AB doing so below cost, the was no chance of adding meaningful competition. Now, for the first time in a long time, there is room for meaningful competition.

Best regards
Thonas

http://gearsofbiz.com/opinion-air-berli ... rth/127279

Interesting article that summarises the whole saga I think and some interesting points as well

tommy1808 wrote:

Revelation wrote:

to the point of making the key loan keeping AB afloat so LH could have their pick of assets.

With EU approval, so clearly that is only in your head.

It is not just in my head that the key loan kept AB afloat so LH could have their pick of assets. That's exactly what happened. By bringing the EU into the conversation you seem to have it in your head that I said that what happened was illegal, but I never did. Everything LH is doing is legal. It's just anti-competitive.

tommy1808 wrote:

The meaningful, ticket below cost dumping, competition has just gone belly up.

I never said that EY's ownership of AB led to meaningful competition. That's another thing coming from your head, not mine.

Now, instead of guessing what is in each others heads, why don't you tell us how you think giving LH control of AB's best assets is going to lead to meaningful competition?

f4f3a wrote:

http://gearsofbiz.com/opinion-air-berlins-fall-to-earth/127279

Interesting article that summarises the whole saga I think and some interesting points as well

As above, the rich get richer:

If you happen to own some shares in Lufthansa, then today’s a good day. As soon as news came through that the German carrier was set to seal a deal to buy up large chunks of the insolvent Air Berlin, its share price shot up to its highest level in 17 years.

Why the surge of optimism? Lufthansa will now have a far greater market share, it will face less competition on domestic routes and its prices are likely to rise as a result.

Revelation wrote:

why don't you tell us how you think giving LH control of AB's best assets is going to lead to meaningful competition?

The point is mood, since no one is giving LH anything, they bought it on an open market and made the best offer to ABs creditors. No one outside of that group had any say to whom the assets will be sold.

The loan would not have gotten EU approval if it had been anti-competitive.

Best regards
Thomas

tommy1808 wrote:

Revelation wrote:

why don't you tell us how you think giving LH control of AB's best assets is going to lead to meaningful competition?

The point is mood, since no one is giving LH anything, they bought it on an open market and made the best offer to ABs creditors. No one outside of that group had any say to whom the assets will be sold.

The loan would not have gotten EU approval if it had been anti-competitive.

Best regards
Thomas

Meanwhile we read: Reuters: Lufthansa's swoop on Air Berlin stirs competition concerns

Revelation wrote:

Meanwhile we read: Reuters: Lufthansa's swoop on Air Berlin stirs competition concerns

As usual competitors like to complain, but fail to offer a better deal.

Let's face it, Lufthansa's offer was simply the best.

KarelXWB wrote:

As usual competitors like to complain, but fail to offer a better deal.

Let's face it, Lufthansa's offer was simply the best.

and a very transparent move, not wanting to pay more, but complaining as much as possible, so LH gets as little of what they paid for in the end.

Lobbying is so much cheaper than investment.

best regards
Thomas

KarelXWB wrote:

Revelation wrote:

Meanwhile we read: Reuters: Lufthansa's swoop on Air Berlin stirs competition concerns

As usual competitors like to complain, but fail to offer a better deal.

Let's face it, Lufthansa's offer was simply the best.

You must realise that the dominant player in a market will always be more willing to pay a higher price to get from 65% control of a market to over 80% because they then have the market power to extract supernormal powers where as a minor player going from 10% to 25% changes their profitability in no meaningful way.