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Lufthansa Joint Venture Folds, While Brussels Airline Fate Unclear

Photo Courtesy: Lufthansa Group
Lufthansa Joint Venture Folds, While Brussels Airline Fate Unclear
Joe Cortez

Amid bailout talks between Lufthansa’s largest shareholder and the German government, two of Lufthansa’s subsidiaries are facing the end of the runway. Joint venture SunExpress is permanently grounding aircraft, while Brussels Airlines could be sold off or enter insolvency protection.

Two more Lufthansa subsidiaries are facing grounding, as a shareholder vote that could decide the company’s fate looms days away. The airline conglomerate is shuttering a joint venture airline, while subsidiary Brussels Airlines could either be sold off or succumb to bankruptcy.

SunExpress Germany Closes Down

SunExpress, a joint venture between Lufthansa and Turkish Airlines founded in 1989, has met its sunset. In a press release, the airline announced a restructuring of the airline through closing the German wing, which will affect up to 1,200 jobs.

The company describes itself as “a true sun specialist,” offering flights to popular vacation destinations in North Africa, Europe and Turkey. But the COVID-19 pandemic forced the airline to ground its entire fleet between April 2 and May 31, 2020. Although the airline is restarting some flights within Turkey and beyond, the charter operation based in Germany will fold.

“The strategically appropriate decision to focus exclusively on our core business is also a bitter one,” Max Kownatzki, CEO of SunExpress, said in a statement. “For all those affected, this is sad news, which was the result of a comprehensive and intensive evaluation of the situation.”

SunExpress Germany focused on charter and vacation flights, with 20 aircraft registered under its Air Operator Certificate. The company also wet leased aircraft on behalf of Lufthansa and Eurowings. With the company shutting down, the assets will be liquidated and all flights will be consolidated under the Turkish company’s AOC. The airline says over 90 percent of flyers holding tickets on SunExpress Germany have been rebooked with alternative flights, or those aboard partner airlines.

Brussels Airlines Could Be Spun Off, or Go Bankrupt

Meanwhile, Lufthansa subsidiary Brussels Airlines is in an equally precarious situation, with its future unknown. Reuters reports the conglomerate sees two potential futures for the Belgian airline.

While the airline is planning to reduce staff by 25 percent and ground nearly a third of its fleet, the airline may be left to go into bankruptcy if airline executives and Lufthansa Group leadership cannot figure out a way to move forward.

Another option would be to sell the airline outright. It’s unclear if Lufthansa Group has been approached by a bidder, or if they are quietly soliciting bids for the airline. Lufthansa has not made a public comment on either possibility.

Both situations come as Lufthansa, the German Government and shareholder Heinz-Hermann Thiele work to iron out a bailout plan for the conglomerate. After discussions on Monday, June 22, 2020, German finance minister Olaf Scholz told European media outlet Euractiv the meeting was “a friendly discussion” of a “good, carefully considered proposal.” Lufthansa shareholders will meet on Thursday, June 25, to vote on the package.

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1 Comment

  1. edgewood49

    June 24, 2020 at 9:41 am

    I think Brussels Airline will be allowed to fold. not sure the Belgian government is in the mood to drop more cash into a losing airline same decision many other countries in the world are having to make.

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