Germany's second largest carrier Air Berlin is holding discussions over a sale of its business to the airlines Lufthansa and Easyjet after filing for insolvency, media reported on Wednesday.
The tour operator Thomas Cook, together with its airline Condor, has also expressed interest in an "active participation in the future of Air Berlin."
The German government has granted an emergency loan facility of 150 million euros (176 million U.S. dollars) in response to the insolvency to enable a continued operation of Air Berlin flights until November. The European Commission subsequently confirmed that it was investigating whether the assistance to the Berlin-based budget airline was compliant with antitrust legislation.
A commission spokesperson said that it was in a "constructive contact with Germany" and always willing to discuss government plans in order to ensure that state aid did not illegally distort competition.
German Transport Minister Alexander Dobrindt did not believe any antitrust regulation had been breached considering that only a partial sale of Air Berlin was being negotiated.
Nonetheless, rival budget airline Ryanair has announced its intention to challenge the provision of state aid before EU competition authorities.
"This artificial insolvency has clearly been constructed to enable Lufthansa to acquire Air Berlin without its debt and this contradicts competition rules in Germany and the EU," Ryanair wrote on its website. Ryanair saw an "obvious conspiracy between the German government, Lufthansa and Air Berlin."
"Now Lufthansa can make domestic flights even more expensive than they already are. Passengers are paying the price for this monopoly," the Dublin-based carrier added.
Several German media quoted an unnamed insider on Wednesday saying that the objective of Air Berlin's insolvency had been to "keep Ryanair out."
On Tuesday, Air Berlin was forced to file for insolvency when its biggest shareholder Etihad refused to offer additional financial support for the unprofitable airline. The Abu-Dhabi based state-owned carrier had sustained Air Berlin throughout years of financial and organizational woes.
Air Berlin had not been profitable for years, posting a record loss of 780 million euros (913 million dollars) in 2016 and accumulating a pile of debt worth 1.2 billion euros (1.4 billion dollars). The firm revealed last week that passenger numbers in July had fallen sharply by 24 percent, finally leading Etihad to renege on an earlier promise of open-ended funding.
During the three months which are now available to Air Berlin for self-administered insolvency procedures, the German government will pay the wages of its 7,200 employees. It remains unclear how many of the firm's staff could keep their jobs.
"We are deeply concerned for the jobs of employees," Christine Behle, director of the trade union ver.di said Wednesday.
Lufthansa so far only made a vague statement that an acquisition would "offer the opportunity to hire staff" and that it intended "to bring these negotiations to a swift and positive conclusion."
The rival firm has considered buying Air Berlin for several years but always balked at the mountain of debt which it would have to assume. At the close of trading on Tuesday, Lufthansa's stock was the biggest daily winner on the DAX exchange after jumping by 4.4 percent.
