In this article about Lufthansa's interest on Condor was a sentence, which caught my eye:

Dagegen hieß es in einer Analyse der Investmentberatung Kepler Cheuvreux: “Wir glauben, Lufthansa ist sehr interessiert an Easyjet.”

In english:

On the other hand, an analysis by investment consultants Kepler Cheuvreux said: "We believe Lufthansa is very interested in Easyjet."

Source:
https://de.reuters.com/article/eu-flugl ... EKCN1QN241

In my eyes it's very unlikely, but if Reuters reports that, it should have some substance, shouldn't it?

If this did become a thing, not sure the competition authorities would allow this.

Consultants have all kinds of funny ideas. And "interested" really can mean anything.

Besides that, it certainly would run into major anti-competition issues and force Lufthansa to divest of parts of its other business interests.

vfw614 wrote:

Consultants have all kinds of funny ideas. And "interested" really can mean anything.

Besides that, it certainly would run into major anti-competition issues and force Lufthansa to divest of parts of its other business interests.

I know that this can mean a lot, but if Reuters reports that, it's in my opinion worth mentioning...

The funny thing is, that this would just happen on the German speaking market. But for routes like Rome to Barcelona, there is no danger of a monopoly. Ryanair and the national airlines are flying these routes, too. So I don't see any problems outside of Germany, Austria and Switzerland concerning the European competition rules. Just the branding of the plane changes so they should not have problems with getting a monopoly...

vfw614 wrote:

Besides that, it certainly would run into major anti-competition issues and force Lufthansa to divest of parts of its other business interests.

At TXL yes they’d have to divest. Possibly at GVA also.

Other airports likely wouldn’t be much of a problem except on route specific cases.

I don't think things would be assessed on an airport-to-airport basis when it comes to a take-over of that magnitude. The beauty on anti-competition law is that the definition of "market" is rather flexible.

Another issue: the largest shareholder in easyJet holds just a third of the shares. Any take-over would be cumbersome and expensive.

Usually now becoming quite standard practice in EU anti-competition authorities are looking on route-by-route cases. There is no definition of monopoly in one specific airport or specific country. So, theoretically, if Lufthansa decides to acquire easyJet, anti-competition authorities will look on overlapping routes only and may request to allow competition to these routes by giving them slots. I don't think there are so many routes where easyJet and Lufthansa routes overlap.

Who is the owner of EasyJet?

EasyJet will soon not be an EU airline, at least the larger UK-based part of it.
Lufthansa would have ownership and control problems in buying a UK airline.
Having said that, the UK Department of Transport has issued today an air policy document which indicated it wants to retain the wider EU+UK framework for airline ownership.
But the formal position of the EU is that ownership restrictions will apply from the UK's exit, which the UK will mirror unless a more liberal policy is agreed with the EU.
https://www.gov.uk/guidance/air-service ... of-no-deal

.

Kepler Cheuvreux are not a major financial institution and something being deliberately said to Reuters may be a way of boosting Kepler's profile a bit. Lufthansa's interest is possible but I would be a little hesitant about jumping to conclusions at this stage.

LH has its hands full already with OS, EW, SN, etc. I'm not sure it knows what it wants to do with them besides form a European Monopoly. Now it's looking into Condor and EasyJet? Reminds me of the days of VW and Ferdinand Piëch.

CometOrbit wrote:

EasyJet will soon not be an EU airline, at least the larger UK-based part of it.
.

Except that the bulk of the UK division (formerly known as EasyJet) has already been moved and re-registered on an Austrian AOC as "EasyJet Europe".

'EasyJet UK' will be left as a non-EU airline post brexit. 'EasyJet UK' will be a teeny tiny fraction of what "EasyJet" was. "Easyjet Europe" is and will be the largest part of the group.



With regards to the OP. "Interested" and "purchasing" are two entirely different things. I don't think LH Group would have the resources for a hostile takeover. I'm quite sure EasyJet group aren't looking to sell.

ChrisKen wrote:

CometOrbit wrote:

EasyJet will soon not be an EU airline, at least the larger UK-based part of it.
.

Except that the bulk of the UK division (formerly known as EasyJet) has already been moved and re-registered on an Austrian AOC as "EasyJet Europe".

'EasyJet UK' will be left as a non-EU airline post brexit. 'EasyJet UK' will be a teeny tiny fraction of what "EasyJet" was. "Easyjet Europe" is and will be the largest part of the group.



With regards to the OP. "Interested" and "purchasing" are two entirely different things. I don't think LH Group would have the resources for a hostile takeover. I'm quite sure EasyJet group aren't looking to sell.

As far as I’m aware there’s going to be well over 100 aircraft in this ‘teeny tiny fraction’ of what easyJet ‘was’. Can you elaborate when you say the division has ‘moved’? I’m not aware of them moving any aircraft out of the UK specifically but that some aircraft have been reregistered.

LH does not want to take, they want to give - Eurowings, Austrian / SN short and medium haul can become EasyJet, for a nice share of LH in EasyJet.

UAUA wrote:

Who is the owner of EasyJet?

Last I checked Stelios was still the largest shareholder and owner of the Easy branding. Has that changed ?

FlapsOne wrote:

As far as I’m aware there’s going to be well over 100 aircraft in this ‘teeny tiny fraction’ of what easyJet ‘was’. Can you elaborate when you say the division has ‘moved’? I’m not aware of them moving any aircraft out of the UK specifically but that some aircraft have been reregistered.

Where have you been? If you check Airfleets you can see 49 Airbus 319 and 90 Aribus 320 registtered under this new airline using the OE- instead of G-. Click on each one of them and you'll see its past resgistrations (ie. G-)

Logically, these planes are prevuious G- planes based around continental Europe. To continue flying these planes under an apocalyptic no-deal Brexit, these planes have "moved" from Easyjet "UK" to Easyjet Europe.

The move does not imply that the aircrafts were physically in the UK, nor they are now physically in Austria

ChrisKen wrote:

CometOrbit wrote:

EasyJet will soon not be an EU airline, at least the larger UK-based part of it.
.

Except that the bulk of the UK division (formerly known as EasyJet) has already been moved and re-registered on an Austrian AOC as "EasyJet Europe".

'EasyJet UK' will be left as a non-EU airline post brexit. 'EasyJet UK' will be a teeny tiny fraction of what "EasyJet" was. "Easyjet Europe" is and will be the largest part of the group.

Easyjet UK is still the largest part of the airline, followed by easyJet Europe and then Easy Swiss

Easyjet "UK" still has 72 A319, 20 A320NEO, 60 A320 and 321NEO. Planes-wise it's 156 vs. 133. Quite close to 50% of Easyjet has "moved" out of UK.
It might not be tiny, but a large sizeable chunk of it (assuming it's completed)

Given LGW alone is like a 50ish aircraft base, it will be indeed hard to see Easyjet "UK" below 100 aircrafts. But given congestion at UK main bases LGW, LTN, MAN... It will be easier to add new frames to the Europe division than the former UK head. (if the is no LH involved like this thread suggests)

Like ChrisKen above, I doubt Lufthansa has the financial firepower to buy easyJet.

easyJet has a market capitalisation of EUR 5.6bn as at close tonight,at current exchange rates.A hostile takeover would cost probably in the EUR 7.5 - 8 bn. Lufthansa market cap is eur 10.64bn, so a cash offer would have heavy consequences on their balance sheet or an all share offer at the other end of the scale would dilute existing shareholders. Also, an interesting comparison is price/earnings ratios - easyJet 13.61, Lufthansa 4.76. Interesting reflection on the market's view of the companies.

vfw614 wrote:

I don't think things would be assessed on an airport-to-airport basis when it comes to a take-over of that magnitude. The beauty on anti-competition law is that the definition of "market" is rather flexible.

Not on the EU level (and this would definitely require a single EU-wide filing). They're very consistent in analyzing city pairs, not broader geographic markets, as this poster correctly said:

smbukas wrote:

Usually now becoming quite standard practice in EU anti-competition authorities are looking on route-by-route cases. There is no definition of monopoly in one specific airport or specific country. So, theoretically, if Lufthansa decides to acquire easyJet, anti-competition authorities will look on overlapping routes only and may request to allow competition to these routes by giving them slots. I don't think there are so many routes where easyJet and Lufthansa routes overlap.

They do look at monopolization of slot portfolios at slot-constrained airports, however.

LMAO. Lufthansa might be interested in easyJet but easyJet is certainly not interested in Lufthansa. Why would an innovative dynamic airline that looks into the future want to associate with a crappy legacy that belongs to the past?

Pardon my ignorance - but what will Easyjet bring to LH (especially considering the cost), that is cannot (and is not) doing by itself, right now?

For the lower cost operations - Eurowings is there - and a much better placed 'competitor' in that market - via providing to the lower costs of the operation, and needs of that market segment.

However, buying a LCC - might grate even further against the majority of LH's brands - which are 'full-service'/legacy carriers. Surely, on the domestic/regional flights - these airlines compete (and sometimes successfully) against the LCCs, however - they do not on long-haul flights. Easyjet has yet to launch, or truly take steps in that direction, and Eurowings are already there with the necessary aircraft. While acquiring Easyjet would benefit in greater market share - the progressive path towards integration would be fraught with obstacles (significant costs, legal obstacles) and difficulties (branding changes, crew integration, labour policies revisited, short/medium term focus on integration and maximization of benefits to the parent company) - and those should not be discounted.

In my opinion, of a greater deal of importance - is this deal to Easyjet. Has LH been 'doing it all right'? What autonomy, would being acquired by a legacy carrier - provide them? Would they be integrated into Eurowings? Or, be two brands - competing against each other, in the same company? Moreover, their successes have come doubly based on fighting the 'legacy carriers' but also on finding niches where they can capitalize. Both proved to be the vehicles to success when they needed them to survive hardships, or downturns. Now, having proven their point - can such a relationship exist - when their future trajectory puts them in increasing competition with these carriers?

It's hard to conceptualize, perhaps in text - but we are one economic downturn away from LH being in difficult straits, and the possibility of Easyjet making a play for them via buyout. It was fascinating to watch AmericaWest 'merge' with US Airways, and then - see that 'merge' with American Airlines. While not a perfect "apples to apples" analogy - it demonstrates some of the more extreme possibilities. At the time, there were a myriad of other happenings, and complexities which aided in these merger's necessities - however, from a distanced view - it looked as if a LCC, operated well on what little it had, enough so to seek out a weakened 'legacy' and then that entity (despite having the lowest customer satisfaction ratings in the class) then 'merged' with the Big One while it was weakened in Bankruptcy. It's not inconsequential to assume that EasyJet's LCC recipe is not the winning one, medium and long term - as the travel grows. They are an order away from being able to operate on long-haul routes - and can revolutionize that area as well. A buyout now would provide short-medium term gains, but might prevent future growth and successes - and based on their past - they've been winning anyway, so why give that away now?

Rajahdhani wrote:

Pardon my ignorance - but what will Easyjet bring to LH (especially considering the cost), that is cannot (and is not) doing by itself, right now?

GEUltraFan9XGTF wrote:

LH has its hands full already with OS, EW, SN, etc. I'm not sure it knows what it wants to do with them besides form a European Monopoly. Now it's looking into Condor and EasyJet? Reminds me of the days of VW and Ferdinand Piëch.

There is no European monopoly. That is the major issue with the EU3 (AFKL, Lufthansa, IAG) when they have tried to expand outside their home markets with their low-cost carriers (Transavia, Eurowings and Vueling/Level respectively). They all have failed. For instance, Transavia started a base in MUC a couple of summers ago: failed. Eurowings has not even tried to start bases outside DACH (Germany/Austria/Switzerland). Vueling in Central Europe?: failure after failure.

The only pan-European carriers today are Ryanair and easyJet. And Wizz Air and Norwegian to a certain extent. LH taking over U2 would make a lot of sense to expand in other markets like the UK, France or Italy where U2 has a major presence and LH can only attack on flights from those countries to DACH.

workhorse wrote:

LMAO. Lufthansa might be interested in easyJet but easyJet is certainly not interested in Lufthansa. Why would an innovative dynamic airline that looks into the future want to associate with a crappy legacy that belongs to the past?

Other airlines wish they were as “crappy” as LH, legacies included. Eventually, easyJet will become a target for some airline with a good aim, unless U2 decides to look for a target itself first. Personally, I think LH has a full plate at the moment, but who knows, maybe there’s some room on the dessert plate?

workhorse wrote:

LMAO. Lufthansa might be interested in easyJet but easyJet is certainly not interested in Lufthansa. Why would an innovative dynamic airline that looks into the future want to associate with a crappy legacy that belongs to the past?

I know Lufthansa is an innovative dynamic airline but you're being unfair on Easyjet , its not that crappy... it's sad and the staff are dreadful BA rejects but it serves a purpose

workhorse wrote:

LMAO. Lufthansa might be interested in easyJet but easyJet is certainly not interested in Lufthansa. Why would an innovative dynamic airline that looks into the future want to associate with a crappy legacy that belongs to the past?

If it’s a hostile takeover then the shareholders will decide. Europe still needs a degree of consolidation and EasyJet does offer solutions in places where LH Group are weak (France, Italy, Portugal, UK) or to consolidate existing bases (Berlin, Geneva). Other than the last two there isn’t that much overlap. Shareholders could gain value out of the two.

Also EasyJet isn’t as dynamic as you make it out to be. They’ve run away from a good number of bases when faced with competition.

SCQ83 wrote:

LH taking over U2 would make a lot of sense to expand in other markets like the UK, France or Italy where U2 has a major presence and LH can only attack on flights from those countries to DACH.

LH already tried with Lufthansa Italia and failed. In the UK they owned the bmi group: 3 airlines for 3 different purposes (or none at all, depends how you look at it) and just got some LHR slots for the LH Group and sold the rest.

Buying Easyjet would only make sense for them without integrating the airline(s) into the LH group and let them operate independently. The way easyjet makes money (just shorthaul, no codeshares, no FF scheme, no global alliance, no interlining, no or very limited connections....) is quite different to how the LH makes money.

If you throw in some of them to the current operation, it might just cease to be a profitable business, so... why the purchase?

dampfnudel wrote:

Personally, I think LH has a full plate at the moment

Yeah, they are too busy sueing their passengers.

Who says Lufthansa has to become a majority or sole shareholder of Easyjet? What about purchasing a significant yet still minority stake in them (just enough to have influence) and establishing an intra-European JV with them? It's a win for Lufthansa because they gain a larger presence in the UK and a large EU point-to-point presence. Plus the obvious benefit of turning an LCC competitor into an ally. It's a win for Easyjet because they gain a larger presence in the non-TXL German market and long-haul feed.

duboka wrote:

In my eyes it's very unlikely, but if Reuters reports that, it should have some substance, shouldn't it?

Why should it? Reuters were just quoting the OPINION of a consultant. They weren't printing it against their name as verified fact. If it turns out to be nonsense they won't have to retract or issue a correction.

This lack of critical thinking or even basic comprehension is why so many people run around with "fake news" in their heads. "I read this on Reuters!" "I saw this on CNN!"

These consultants often have their own agendas, non-story.