Lufthansa has bought a large chunk of Air Berlin

Lufthansa has bought a large chunk of Air Berlin

Lufthansa has bought a large chunk of Air Berlin

Lufthansa will sign a deal today to buy parts of insolvent German carrier Air Berlin, Lufthansa chief executive Carsten Spohr said. The German government then stepped in to buy time for what was the country's second-biggest airline with a €150 million ($178 million) loan until it could find a buyer.

It said last month that negotiations with Lufthansa and EasyJet would continue until Friday.

A person who is familiar with the ongoing situation said Wednesday that Lufthansa, the largest airline in Germany, was going to acquire the Niki, the Austrian leisure travel line of Air Berlin, its regional airline LG Walter, and also some other aircraft that were short-haul. But the pressure was on to reach a deal this week, as Air Berlin's planes will no longer be allowed to fly after October 28 under insolvency rules.

The sale still needs approval from creditors and European Union anti-trust authorities to take effect.

Lufthansa shares were up over 2.9%, which was the highest mover on the DAX market index in Germany in Thursday morning trading.

Analysts at Bernstein Research raised their rating on Lufthansa's shares to "outperform" from "market-perform", saying they expected a deal with Air Berlin to add around 70 to 90 million euros to annual operating profits at Lufthansa's budget unit Eurowings in the medium term.

Air Berlin, which once employed around 8,000 people, filed for bankruptcy in August after its funding was cut off by Etihad, one of its major shareholders. He said in the Rheinische Post that he expects airline competition to get even more intense, and that it's only right that airlines that can't break even should disappear from the market-he gave Monarch in the United Kingdom and Alitalia in Italy as examples.

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