Ryanair to buy Niki Lauda airline in challenge to Lufthansa

Austrian entrepreneur in the aviation sector and former Formula One champion Niki Lauda stands in front of an Airbus plane of his new Laudamotion airline in Duesseldorf, western Germany, on March 20, 2018. Ryanair said on Tuesday it is planning to take over the majority interest of Laudamotion. (AFP)
Updated 20 March 2018
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Ryanair to buy Niki Lauda airline in challenge to Lufthansa

BERLIN: Ryanair has agreed to buy a majority stake in the new Austrian leisure airline founded by former motor racing champion Niki Lauda in a major push on the German and Austrian markets dominated by Lufthansa.
The Irish airline, Europe’s largest low-cost carrier, has agreed to buy an initial 24.9 percent stake in Vienna-based Laudamotion, formed out of insolvent carrier Niki, formerly part of Air Berlin.
That will rise to 75 percent “as soon as possible,” subject to EU regulatory approval, the airlines said in a statement. Ryanair will lease Laudamotion six-crewed planes to increase its fleet to 21 planes this summer and to 30 planes within three years. Ryanair currently operates a fleet of 430 Boeing 737s.
Niki, which flies to tourist destinations from Germany and Austria using Airbus A320 planes, was seen as the most attractive part of insolvent Air Berlin and this deal sees it end up in the hands of Ryanair, after attempts by Lufthansa and British Airways-parent IAG to secure it.
“This surprise move by Ryanair will be exactly what Lufthansa is not looking for,” aviation consultant John Strickland said.
“Despite the consolidating effect of the majority Air Berlin acquisition (under which Lufthansa bought much of the business, but not Niki) they will face not only growing Ryanair capacity in Germany but now also significant influence in Austria,” he said.
Germany has been slow to open up to low-cost airlines, helping to protect home carrier Lufthansa against the march of the likes of easyJet and Ryanair.
Low-cost carriers typically account for about 10-20 percent of traffic at Germany’s airports, while they command an over 50 percent market share in Europe as a whole on short-haul flights.
But after the collapse of Air Berlin, Germany’s second largest airline, the budget players are taking their chance to expand. EasyJet has acquired Air Berlin’s operations at Berlin Tegel airport and has started German domestic routes in competition with Lufthansa.
Ryanair CEO Michael O’Leary had been a fierce critic of Lufthansa’s initial plans to buy much of Air Berlin. After dropping the Niki plans, Lufthansa has ended up with Air Berlin unit LGW, but also took on 77 of the defunct carrier’s fleet of around 140 leased planes.
Lufthansa also recently overtook Ryanair as Europe’s largest airline by passenger numbers and the Laudamotion acquisition could help Ryanair to regain the title.
“This Laudamotion partnership is good news for Austrian and German consumers/visitors who can now look forward to real competition, more choice and lower fares,” O’Leary said in a statement.
Niki Lauda needed partners to help get Laudamotion off the ground and was working with Thomas Cook’s Condor and was also in discussions over leasing crewed planes to Lufthansa’s budget arm Eurowings.
Lauda said on Tuesday the talks with Eurowings continued. Condor CEO Ralf Teckentrup said it planned to start marketing Laudamotion flights this week, as agreed.
The deal gives Laudamotion “unbelievable sales power,” Lauda told journalists onboard a flight from Vienna to Duesseldorf. “I met O’Leary recently and we came to an agreement relatively quickly,” he said.
Ryanair will invest less than €50 million ($62 million), though will provide an additional €50 million in funding for start-up and operating costs in the first year.
Laudamotion will start flying from Germany this week, from Switzerland in April and from Austria in June, Lauda said.
Ryanair has for two decades operated only Boeing 737s, a model that it says allows for significant flexibility and savings on training and maintenance.
But O’Leary said Laudamotion would support a fleet of Airbus aircraft “which is something we have hoped to develop within the Ryanair group for some years.”
An Airbus fleet could give O’Leary leverage in future orders from Boeing and would allow it to hire pilots trained for Airbus as well as Boeing planes in an extremely competitive European labor market. Aer Lingus, which Ryanair was twice blocked from buying by European regulators, operated an all-Airbus fleet.
The Laudamotion deal will be a rare acquisition for Ryanair, which has not bought an airline since Buzz in 2003. Ryanair closed that airline a year later.


EU fines Nike $14 million for blocking cross-border sales of football merchandise

Updated 25 March 2019
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EU fines Nike $14 million for blocking cross-border sales of football merchandise

  • The European Commission said Nike’s illegal practices occurred between 2004 to 2017
  • Sales restrictions relate to licensed merchandise for FC Barcelona, Manchester United, Juventus, Inter Milan, AS Roma and the French Football Federation

BRUSSELS: US sportswear maker Nike was hit with a $14.14 million (€12.5 million) fine on Monday for blocking cross-border sales of football merchandise of some of Europe’s best-known clubs, the latest EU sanction against such restrictions.
The European Commission said Nike’s illegal practices occurred between 2004 to 2017 and related to licensed merchandise for FC Barcelona, Manchester United, Juventus, Inter Milan, AS Roma and the French Football Federation.
The European Union case focused on Nike’s role as a licensor for making and distributing licensed merchandise featuring a football club’s brands and not its own trademarks.
The sanction came after a two-year investigation triggered by a sector inquiry into e-commerce in the 28-country bloc. The EU wants to boost online trade and economic growth.
European Competition Commissioner Margrethe Vestager said Nike’s actions deprived football fans in other countries of the opportunity to buy their clubs’ merchandise such as mugs, bags, bed sheets, stationery and toys.
“Nike prevented many of its licensees from selling these branded products in a different country leading to less choice and higher prices for consumers,” she said in a statement.
Nike’s practices included clauses in contracts prohibiting out-of-territory sales by licensees and threats to end agreements if licensees ignored the clauses. Its fine was cut by 40 percent after it cooperated with the EU enforcer.