Air Berlin says talks with easyJet continue

Frankfurt-based Lufthansa will sign a contract to buy 81 of Air Berlin’s 144 planes and take on 3,000 of its 8,500 staff

Lufthansa will pay around €210 million ($248 million) to buy 81 of Air Berlin's planes and take on 3,000 of its 8,500 employees, as well as take over Air Berlin's Austrian leisure travel airline Niki, and regional airline LG Walter.

He said he decided not to submit a bid as it was a "conspiracy" between the German government, Lufthansa, and Air Berlin that would drive up prices for customers.

The CEO said that a milestone in Lufthansa's history will be seen in Berlin on Thursday.

A Lufthansa spokesman declined to provide further details because the agreement had not yet been signed. News of the deal pushed Lufthansa shares up more than 3 per cent to their highest level in almost 17 years.

While Air Berlin officials have been in negotiations for weeks with Lufthansa and easyJet about selling parts of the business, the airline dealt with years of financial losses before its biggest shareholder, Gulf carrier Etihad, stopped financing the company.

Lufthansa CEO Spohr said that he expected the imminent deal for Lufthansa with Air Berlin would receive necessary approval from the European Union before the end of 2017.

"We will only be able to breathe when the Commission has finally confirmed the transaction", Air Berlin boss Thomas Winkelmann said in the company's statement.

Italy's national airline Alitalia is in administration and seeking investors too, British leisure airline Monarch collapsed at the start of this month.

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 Eurowings in the medium term.

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