Lufthansa Is Taking Over Most of Air Berlin

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Air Berlin filed for insolvency in August, after main shareholder Etihad refused to provide further financial support.

Germany's biggest airline Lufthansa will buy more than half of the aircraft of its bankrupt competitor Air Berlin, chief executive Carsten Spohr said on Thursday.

"We will see a milestone in the history of Lufthansa and Air Berlin today", he said.

While Air Berlin and Lufthansa's low-priced branch Eurowings are the only carriers serving routes such as between Munich and Cologne, Spohr said the deal won't mean rising prices as competition "will intensify in Europe and worldwide".

HSBC analysts lifted their target share price to 29 euros from 25 euros, citing the imminent agreement with Air Berlin, a new multi-year labour deal with pilots announced this week and a positive trading performance this year.

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However, Air Berlin chief executive Thomas Winkelmann said last week the agreement would need a green light from European authorities in a process that might take "several weeks or months".

Air Berlin's stated aim was to secure a future for 80% of its employees-indeed, earlier this week it said 500 of them had received job offers from other companies such as chemicals company BASF, railroad operator Deutsche Bahn and online fashion retailer Zalando, who participated in a special job fair coordinated by Air Berlin and a Berlin regional employment agency.

While it conducted the negotiations, Air Berlin's planes were kept in the air by a government loan of 150 million euros.

The deal was reported Thursday morning by the Rheinische Post and confirmed to Fortune by Lufthansa.

Flights operated by Air Berlin subsidiaries Niki and LG Walter, which are not insolvent, will continue indefinitely, the company said.

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