Officials doubt Air Berlin can continue in present form

An Air Berlin airplane is seen on the tarmac at the airport in Vienna, in this August 16, 2017 photo. (AFP)
Updated 20 August 2017
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Officials doubt Air Berlin can continue in present form

BERLIN: The prospects for maintaining insolvent airline Air Berlin or its existing route network as a coherent whole appeared to be receding after officials warned that the airline was not viable and that a straight takeover would raise competition concerns.
A takeover of Air Berlin as a whole to keep it operating would not be possible, German Deputy Economy Minister Matthias Machnig said on Saturday, pouring cold water on one airline investor’s approach.
“The model of Air Berlin as an independent airline has failed,” he told a radio station on Saturday.
Germany’s Hans Rudolf Woehrl, who made a name for himself when he bought German airline Deutsche BA from British Airways for €1 ($1.18), threw his hat in the ring for Air Berlin on Friday and said he wanted to keep it flying after buying it.
Separately, the head of Germany’s advisory Monopoly Commission said that allowing Germany’s flag carrier Lufthansa to take over Air Berlin’s route network would render large numbers of German domestic routes uncompetitive.
The Monopoly Commission president told Die Welt newspaper in an interview that while the increased international market share for Lufthansa would be welcome, “it would not be persuasive if this were achieved by dispensing with competition on German routes.”
His remarks appear to be at odds with the views of German Federal Transport Minister Alexander Dobrindt, who has called for the creation of a German airline “national champion” — a turn of phrase which Die Welt said had also set alarm bells ringing in Brussels.
Talks on carving up Air Berlin, which said on Tuesday it was filing for insolvency, started on Friday, with Lufthansa getting the first meetings ahead of other potential bidders.
Earlier in the week, a source familiar with the matter said easyJet was among those in talks, and Thomas Cook’s German airline Condor said it was ready to play “an active role” in Air Berlin’s restructuring.
Machnig said it would take several investors to offer Air Berlin and its employees a long-term future, reiterating that Lufthansa would not be the only buyer of the carrier’s assets.
He dismissed a complaint by Ryanair over the handling of the insolvency process, which its Chief Executive Michael O’Leary describes as a “conspiracy,” saying O’Leary was welcome to play a role in Air Berlin’s restructuring.
“I am entirely willing to discuss the matter,” Machnig said.


OPEC oil ministers gather to discuss production increase

Updated 19 June 2018
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OPEC oil ministers gather to discuss production increase

  • Analysts expect the group to discuss an increase in production of about 1 million barrels a day
  • The officials were arriving in Vienna ahead of the official meeting Friday

VIENNA: The oil ministers of the OPEC cartel were gathering Tuesday to discuss this week whether to increase production of crude and help limit a rise in global energy prices.
The officials were arriving in Vienna ahead of the official meeting Friday, when they will also confer with Russia, a non-OPEC country that since late 2016 has cooperated with the cartel to limit production.
Analysts expect the group to discuss an increase in production of about 1 million barrels a day, ending the output cut agreed on in 2016.
The cut has since then pushed up the price of crude oil by about 50 percent. The US benchmark in May hit its highest level in three and half years, at $72.35 a barrel.
Upon arriving, the energy minister of the United Arab Emirates, Suhail Al Mazrouei, said: “It’s going to be hopefully a good meeting. We look forward to having this gathering with OPEC and non-OPEC.”
The 14 countries in the Organization of the Petroleum Exporting Countries make more money with higher prices, but are mindful of the fact that more expensive crude can encourage a shift to renewable resources and hurt demand.
“Consumers as well as businesses will be hoping that this week’s OPEC meeting succeeds in keeping a lid on prices, and in so doing calling a halt to a period which has seen a steady rise in fuel costs,” said Michael Hewson, chief market analyst at CMC Markets UK
The rise in the cost of oil has been a key factor in driving up consumer price inflation in major economies like the US and Europe in recent months.
Already US President Donald Trump has called on OPEC to cut production, tweeting in April and again this month that “OPEC is at it again” by allowing oil prices to rise.
Within OPEC, an increase in output will not affect all countries equally. While Saudi Arabia, the cartel’s biggest producer, is seen to be open to a rise in production, other countries cannot afford to do so. Those include Iran and Venezuela, whose industries are stymied either by international sanctions or domestic turmoil. Iran is a fierce regional rival to Saudi Arabia, meaning the OPEC deal could also influence the geopolitics in the Middle East.