You are here: Home » Reuters » News
Business Standard

Lufthansa, Ryanair row over planes for Austrian carrier Laudamotion

Reuters  |  FRANKFURT 

(Reuters) - plans to end an agreement to lease planes to Laudamotion, saying the Austrian has failed to meet payments, leading to a dispute with its backer

The row highlights a battle for market share in and after the collapse of and shows how keen airlines are to get planes against the backdrop of recent delivery delays due to engine issues.

Laudamotion, formed out of the remains of that was part of Air Berlin, flies a fleet of 9 leased from and 10 737 jets from new shareholder

"has recently failed - repeatedly - to meet its contractually-agreed lease payment obligations," said in a statement on Friday.

Lufthansa said it needed planes to expand its and it has therefore exercised a right to terminate the lease agreements.

denied that it had failed to meet lease payments and said Lufthansa had failed to pay for carrying out flights on its behalf during March-May.

"has repeatedly honoured both its aircraft lease payments and maintenance reserves to Lufthansa. Lufthansa's claims of 'repeated failure' to pay is false," the Irish carrier said.

Whether Lufthansa can end the contracts depends on a decision by a court in Britain, with a hearing expected on July 20.

Ryanair, which on Thursday received approval to take its stake in Laudamotion up to 75 percent from a current 24.9 percent, said Laudamotion was under threat from the German group.

"Lufthansa is abusing its dominant position in the German and Austrian markets in a blatant attempt to eliminate a much smaller, Austrian competitor, Laudamotion," Ryanair said in a statement on Friday.

The collapse of Air Berlin, Germany's second-largest airline, led to a fight among carriers easyJet, IAG and Ryanair to pick up the pieces and gain a foothold in the German and Austrian markets and challenge incumbent Lufthansa.

"The suggested attempts to spike Laudamotion's suggests that (Lufthansa) sees the carrier as a threat to its dominant position in the German market, especially on routes to Spain, with a more robust Laudamotion a bigger threat to it in 2019," Goodbody analysts wrote in a note.

Lufthansa had wanted to acquire Niki, plus other parts of Air Berlin, but was forced to abandon its plans for anti-trust reasons.

It was told by the during the takeover review to make planes available to any new owner of Ryanair said Lufthansa had failed to deliver 2 of 11 planes and had delayed delivering others.

Lufthansa rejected the accusations, saying it had fully complied with all Commission obligations.

Lufthansa said it had offered to sell 10 planes to Laudamotion but that Laudamotion wanted to lease them instead. The tenth plane is due to go to Laudamotion at the end of July, a said.

(Reporting by and Ilona Weissenbach; Additional reporting by Kirsti Knolle; Writing by Victoria Bryan; Editing by and Jane Merriman)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, July 13 2018. 21:50 IST
RECOMMENDED FOR YOU