IAG Expected To Buy Niki (Former Airberlin Subsidiary)

Soon we’re going to need some sort of an ownership flow chart, given how intertwined the major European airlines have become.

A couple of weeks ago it was announced from one day to the next that NIKI, the Austrian low cost carrier, would cease operations.

Essentially Niki was a wholly owned subsidiary of airberlin, and airberlin ceased operations in October, after Etihad withdrew their financial support. Despite that, Niki has continued to operate as usual. That’s because they received funding from Lufthansa, as Lufthansa was planning on taking them over in order to expand their Eurowings division.

Unfortunately that plan collapsed, as the European Commission said that they wouldn’t approve Lufthansa’s takeover of Niki over concerns of lack of competition. As a result, Lufthansa withdrew their bid for Niki, and stopped funding them, so they were forced to cease operations.

It looks like we haven’t necessarily seen the end of Niki, though. It’s being reported that IAG is set to take over Niki. For those of you not familiar, IAG is the parent company of British Airways, Iberia, Aer Lingus, Vueling, LEVEL, etc., and they’re even partly owned by Qatar Airways. At this point IAG is the only remaining bidder for Niki’s assets, and they’ve apparently made an offer of around 40 million EUR. Per DW:

“IAG is the last remaining bidder and is still negotiating now,” the person was quoted as saying by DPA. Reportedly, IAG had made “the highest bid” in the range of “a double-digit million-euro amount.”

German newspaper Bild put the figure at around €40 million ($48 million) without citing sources.

This is an interesting move for IAG, which has certainly been focused on the ultra low cost segment lately, as they’ve expanded Vueling and LEVEL. This would give them an instant presence in Vienna, so it could be a new hub from which they could expand operations.

It’s not like they’d be getting all that much from buying Niki, really. Niki doesn’t own any of their planes, so really they’d just be taking over their leases (if they so desire), their airport space and slots, etc. Mainly this is just an easy way for them to quickly ramp up operations in a new market.

With Lufthansa’s Niki bid having been rejected, the airline instead planned to put the money towards growing in Niki’s former markets, given the space that would become available. I suppose IAG hopes to stop that to some degree by taking over Niki.

I’ll be curious to see how this develops.

What do you make of IAG’s plan to take over Niki?

Comments

  1. Flew Niki back in 2014 and absolutely loved them. Even though they are considered a low cost carrier at the time they provided complimentary food and beverage on the short flight from Vienna to Frankfurt and had great seats. Flew the E190 and it was super comfortable. Haven’t flown them since sadly but would be happy to see them under the IAG banner especially if they join OneWorld or offer award flights to American Airlines and British Airways frequent flier members.

  2. Heh. So in Europe, it’ll be a Big 3 as well? We’ve got LH group, AF/KL, and IAG, all packing huge market shares.

  3. NIKI used to have food/drinks on their flights, even as low cost. If IAG takes over, they’ll never let the low-cost NIKI have food/drink and their “main airline” BA not have this in intra-Europe flights. They’ll just become another EW/W6 I reckon.

  4. Flew Niki two years ago ZRH-VIE. I thought they were a solid, low-cost airline. I would love to see IAG invest and grow a central European hub that they currently lack. So much of IAG is focused on the western edge of Europe in the UK, Ireland, and Spain and makes LH so much more attractive if you are traveling within Europe as there is less backtracking.

  5. I guess they will fully integrate it into Vueling, which is their low cost short haul subsidiary. Complimentary food had gone on Niki forma while and had never been offered on Vueling, so I guess it won’t be re-introduced.

    I think the main interest of IAG/Vueling are slots and gate positions in VIE, ZRH and DUS (in that order). The TXL slots have already been taken over by LH/EW/LX and U2 (Easyjet). Niki had a slot of them in VIE (obviously) and ZRH (taken over from 4T Belair very recently). As for ZRH they might swap the gate position internally, in order to allow BA to use D gates for all their flights and move VY to remote positions/E gates. IAG is now number two at ZRH, after the bankruptcy of AB/HG and has long been unhappy about the way they had been treated by Zurich airport and LX … So I guess they want to see some guarantees before paying …

    Personally, I hope to see some new VY destinations out of VIE and ZRH.

  6. Hopefully IAG gets the airline and puts them in ONEWORLD again. ONEWORLD really needs a central European hub and Vienna could be it.

  7. @Raul. Only if you ignore the huge presence of Ryanair (Europe’s biggest airline) and EasyJet (Bigger than BA).

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