Lufthansa to add Brussels Airlines to Eurowings

Deutsche Lufthansa AG plans to buy the remaining shares of Brussels Airlines and fold the Belgian carrier into its low-cost unit Eurowings, adding capacity to better compete with Ryanair and Easyjet.

Image copyright: aircraftspotting.de

Lufthansa will start talks with Brussels Airlines to exercise the option to buy the 55% it doesn’t already own in the parent company SN Airholding, the airline said in a statement.

Lufthansa had a deadline to exercise the option by June, but has agreed with SN on an extension until the end of August to give the airline time to recover from the March 22 attacks at Brussels Zaventem airport. 

Lufthansa’s CEO, Carsten Spohr is under pressure to get his low-cost carrier on track. Resistance by unions to cut crusts has slowed progress and the spats continue. Eurowings has also suffered operational problems, including delays caused by technical glitches on new long-haul routes and limited sales within Europe. 

Brussels Airlines operates a fleet of 46, mostly A320s, the same as Eurowings, that will only operate the type once it’s smaller Bombardier CRJs have been replaced. Eurowings had a fleet of 86 at the end of last year and plans to increase the number of aircrafr to almost 11 by the end of 2016. 

Lufthansa bought 45% of the Belgian carrier for €65 million (US$74 million) in 2008 and has had an annual option to buy the rest for a price which will depend on the airline’s performance. Brussels Airlines reported a profit in 2015, the first since Lufthansa acquired its stake. 

Last month’s attacks in Brussels will reduce the net income by about 70 million euros this year, the airline said.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s