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Lufthansa CEO says to sign Air Berlin deal today

12 October 2017

The German news agency dpa is reporting that Lufthansa CEO Carsten Spohr says the airline will sign an agreement to buy large parts of the bankrupt carrier Air Berlin.

Air Berlin declared itself insolvent on August 15 after losing financial support from its majority investor, Etihad Airways, and began negotiations with Lufthansa and the United Kingdom's easyJet, which were set to conclude on Thursday.

Spohr said that both airlines will sign the agreement later in the day in Berlin.

Spohr said, "Today is a big day, which we will seal in a few hours with a signature".

The deal will leave Lufthansa, a traditionally high-cost "flag carrier", in a much better position to compete with the likes of EasyJet and Ireland's Ryanair, which have taken large chunks of its share in short-haul routes within Europe.

In 2016, Air Berlin showed a record 782 million euros in losses - a 75 per cent increase compared to 2015 - which the company attributed to restructuring costs and depreciation.

Spohr told the daily Rheinischen Post on Thursday that Lufthansa plans to invest 1.5 billion euros in taking over 81 Air Berlin aircraft - about half of the carrier's fleet - and hiring 3,000 of its employees.

EasyJet reportedly has been discussing acquiring 27 to 30 planes.

Easyjet is negotiating with Air Berlin to possibly acquire the remaining 20 to 30 aircraft from the carrier, which previous year ran up a loss of about 782 million euros and has debts totaling almost 1.2 billion euros.

However, on Monday, Air Berlin announced that it would end all flight services by October 28. The big question now is what will come out of the EasyJet talks-an Air Berlin spokesperson declined to comment on Thursday morning, suggesting a statement would come out later in the day, while EasyJet also refused to comment on the "ongoing discussions".

Lufthansa CEO says to sign Air Berlin deal today