The Strategist

Etihad refuses equity stake in Lufthansa


01/18/2017 - 15:46



UAE state-owned airline Etihad Airways does not intend to increase its share in German air carrier Lufthansa, said Head of Etihad James Hogan.



Alf van Beem
Alf van Beem
According to him, Etihad is interested in strengthening partnership with Lufthansa. However, there is no question of increasing stake in the German carrier’s capital.

"Etihad has made no equity investments in the German carrier" - The Wall Street Journal cited Hogan's statement, made on sidelines of AirFinance conference.

On Tuesday, Italian newspaper Il Messaggero said that leaders of both airlines for several weeks have been studying a possibility of Etihad buying 30-40% stake in Lufthansa via a capital increase. Now, the companies are exploring the possibility of a full merger, said the publication. 

Once the information emerged, Lufthansa’s shares during trading on January 17 rose by 6%. Meanwhile, analysts were skeptical about possibility of such a deal. According to requirements of European legislation, local investors should be the main shareholder of airlines. Currently, 69% of Lufthansa’s shares are owned by German investors, 13% - by the US, and 9% - by representatives of other states.

Earlier it was reported that Etihad Aviation Group Board of Directors approved a plan to create a unified airline with German travel company TUI AG and Air Berlin (the second largest German airline). The new airline will serve a wide network of routes from Germany, Austria and Switzerland and will start operations in April 2017.

Etihad Airways is a national airline of the United Arab Emirates. Founded in July 2003, it is based in Abu Dhabi, the capital emirate of the UAE.

Deutsche Lufthansa Group is one of the largest European airline, headquartered in Cologne. Workforce as of March 31, 2016, totaled 121.89 thousand people.

source: marketwatch.com




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