Austria’s Niki faces bankruptcy – IAG buysBack to Forum
Austria’s Niki now faces an uncertain future as Lufthansa’s bid has been blocked by the European commission.
All Niki flights have been cancelled effective December 14.
Looks like a sad end to an airline which, back in 2014, launched flights between Vienna and AbuDhabi in conjunction with Etihad.13 Dec 2017
Very sad and shortsighted of the EU Commission. Not sure what sort of stake Niki Lauda still has but irrespective he must be very sad. Considering they are already flying with LH’s support why not let the takeover happen and keep the jobs that will surely now go.13 Dec 2017
Niki Lauda had a backer to re-purchase the airline and it looked good since he knew how to run it.
German government and LH probably don’t like the competition and easyjet will be happy too since their euro airline is based in Austria.14 Dec 2017
LH/U2 obviously trying to duopolise in Austria since Thomas Cook very interested and Niki Lauda wants to take it back if they let him,maybe he should speak to their new nationalistic government?17 Dec 2017
From the articles above:
“The Austrian carrier [Niki] has since announced it will cancel all flights effective December 14.”
“Lufthansa’s bid for Niki… was blocked by the European Commission [since it] feared that Lufthansa Group … would gain a monopoly on most routes in Germany and Austria”
Am I the only person who notices the incongruity?
The Commission seem to think it is better to have competition shut down and reduce capacity than allow it to be taken over and maintain capacity.
The laws of supply and demand generally dictate that lower capacity without a change in demand leads to higher prices.
Which is better for the consumer – a monopoly with high demand and low capacity, or a monopoly with high demand and high capacity? I know which one I would opt for. What a shame the Commission think that a high-demand-low-supply monopoly is better than a high-demand-high-supply monopoly.27 Dec 2017
Ian, the trouble is the EU Commission is all about what THEY think is consumer protection, even if it means the consumer will lose out. MIFID2 is a classic example as is this ruling among many others.
I may be wrong, but I bet any money LH put into Niki was secured on landing rights or something else.27 Dec 2017
It is looking increasingly likely…. IAG is remaining bidder for insolvent airline Niki: source
This will I imagine annoy Lufthansa.
Yes, especially since (according to the FT)
“Lufthansa has abandoned plans to buy Air Berlin’s subsidiary Niki after the European Commission raised concerns the deal would lead to higher prices and less consumer choice.”
It must mean that IAG is buying Niki to offer lower prices and increase competition….29 Dec 2017
Confirmed. IAG will acquire Niki for Euros 20 million.29 Dec 2017
Tragic. Now watch Niki descend to the same depths as Vueling, but as long as it makes a profit for WW and IAG’s shareholders (I happen to be one) all will be sweetness and light.30 Dec 2017