September 10, 2016 / 11:18 AM / 3 years ago

Lufthansa to decide on Air Berlin lease deal this month - report

Planes of the Lufthansa airline stand on the tarmac in Frankfurt airport, Germany, March 17, 2016. REUTERS/Kai Pfaffenbach/File Photo

FRANKFURT (Reuters) - Germany’s biggest airline Lufthansa (LHAG.DE) is set to give the go-ahead for renting about 40 planes and crew from Air Berlin AB1.DE at a supervisory board meeting at the end of this month, Sueddeutsche Zeitung reported on Saturday.

The partnership would see Lufthansa renting planes and crew not operating out of Air Berlin’s main hubs in Berlin and Duesseldorf in a deal known in the industry as a wet lease, the newspaper said, without specifying its sources.

Loss-making Air Berlin would get fixed rate payments, while Lufthansa would assume the economic risk of operating the aircraft.

People familiar with the matter told Reuters in July that Lufthansa was in talks with Air Berlin about the pact, which would affect about a quarter of Air Berlin-owned planes.

The deal could allow Lufthansa to rapidly expand its budget Eurowings network and would ease pressure on Air Berlin, which is struggling to return to profit.

Airline CEOs this week predicted that tough competition in the industry could accelerate consolidation.

Lufthansa is also expected to make a decision this year on whether to take over the remaining stake in Brussels Airlines after delaying the decision due to the attacks in Brussels earlier this year.

Lufthansa and Air Berlin declined to comment.

Reporting by Victoria Bryan and Ludwig Burger; Editing by Alexander Smith

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