Wednesday, January 18, 2017

Lufthansa, Etihad deny merger rumours

UAE's Etihad Airways has denied recent reports about a possible merger with Germany's Lufthansa, said a report.

Media speculations arose when Reuters had quoted Italian newspaper Il Messaggero which reported that executives from both airlines had for weeks been examining the possibility of Etihad buying a 30 to 40 per cent stake in Lufthansa through a sale of new shares to the Abu Dhabi state-owned airline, as a precursor to a merger, Khaleej Times reported.

The report sent Lufthansa’s share price up by over 6 per cent earlier on Tuesday before closing up 4.3 percent at €11.81.

The report received a sceptical reaction from analysts, citing the foreign ownership rules governing international traffic rights, and questioning what the benefits for Lufthansa would be, it said.

Lufthansa is currently almost 69 per cent owned by German investors but 13 per cent is in the hands of US investors and a further nine per cent is owned by other nationalities.

Lufthansa and Etihad last month signed a flight code-sharing deal after Lufthansa agreed to lease 38 crewed planes from airberlin, which is part-owned by Etihad, the report said.

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