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Air Berlin's fall to earth

8 7 0
12.10.2017

If you happen to own some shares in Lufthansa, then today's a good day. As soon as news came through that the German carrier was set to seal a deal to buy up large chunks of the insolvent Air Berlin, its share price shot up to its highest level in 17 years.

Why the surge of optimism? Lufthansa will now have a far greater market share, it will face less competition on domestic routes and its prices are likely to rise as a result. Yet some doubts linger.

DW business editor Henrik Böhme

It's certainly a bad day for the majority of Air Berlin's 8,000 employees. Lufthansa will take on 3,000 of them, as well as purchase 81 planes from the bankrupt airline. But for the 5,000 other workers the future is still uncertain.

What exactly will transpire with British low-cost carrier easyJet, which has been negotiating for some of Air Berlin's assets, also remains to be seen.

One thing is clear though — ordinary workers will suffer because of botched boardroom decisions.

Hunold's vision

For Air Berlin, this above all else has been a fall to earth from what once were great heights. The company was set up in 1978 by an American pilot looking to operate charter flights from West Berlin. At that time only planes registered in France, the US or the UK could access the relevant air routes.

When the Berlin Wall came down, the way was cleared for expansion and the airline became known for operating regular flights to Mallorca in Spain. The new boss, Joachim Hunold, was hugely ambitious. A former marketing chief at LTU, a German leisure airline, Hunold wanted to greatly expand Air Berlin's route network.

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