Germany's Federal Cartel Office (Bundeskartellamt) has given its consent to the aircraft wet-lease agreement struck between the country's two largest carriers, Air Berlin (1991) (Berlin Tegel) and Lufthansa Group, involving thirty-eight A320 Family aircraft.

Last year, Air Berlin unveiled a far-reaching restructuring plan aimed at curbing costs and overcapacity in already saturated markets. It agreed to place thirty-three A319-100 and A320-200 aircraft with Eurowings (EW, Düsseldorf) on six-year contracts beginning in February of this year. In addition, it also agreed to lease five A320-200s to Lufthansa's Austrian Airlines (OS, Vienna) unit with placements set for March and April 2017. However, before the agreement could proceed, the relevant European regulatory authorities had to sign off on it.

As such, in a statement issued Monday, January 30, the antimonopoly regulator said that prior to giving its consent, it had consulted Airport Coordinator Germany, studied market data, and talked to a large number of market players to assess the impact the arrangement would have on competing carriers. While several rival airlines, presumably Ryanair (FR, Dublin International) among them, did oppose the agreement, the Bundeskartellamt said the majority of customers and travel agents did not express any serious competition concerns.

But, according to the President of Bundeskartellamt, Andreas Mundt, based on the results of the competition assessment, it could be left open whether the wet-lease agreement does, in fact, constitute a merger as defined under German competition law.

"This case raised specific questions. From a competition perspective, the lease of aircraft from a competitor needs to be assessed differently than the takeover of the competitor itself," he said. "The agreement between Lufthansa and Air Berlin does not relate to the routes served by the two air carriers. Lufthansa will not take over any of Air Berlin's slots. Nor will the lease of the aircraft affect the re-allocation of slots that have so far been used by Air Berlin. Naturally, with the additional aircraft, Lufthansa will be able to expand its business. However, this potential expansion is not sufficient to justify a prohibition of the agreement."

Other aspects of the restructuring process which Air Berlin is currently undergoing (in particular the planned joint venture between TUI, Etihad Airways (EY, Abu Dhabi International) and Niki (Austria) (Vienna)) were not the subject of the notification and therefore not part of the Bundeskartellamt's investigations.