Thousands of European travelers could be left stranded by the bankruptcy of Austrian budget carrier Niki.
Administrators for Niki, the budget airline, began urgent talks to find a buyer yesterday after it filed for insolvency stranding 5,000 passengers.
The European Commission said Wednesday that Lufthansa's move was "regrettable" but that its offer for Air Berlin posed "clear risks to Austrian, German and Swiss consumers and to effective competition".
Niki posted a notice on its website saying passengers should contact their tour operator if possible.
The Austrian government said it will make sure that Niki passengers stranded overseas will be brought home, for instance by chartering planes from other airlines, a spokesman for acting transport minister Joerg Leichtfried said by telephone.
According to Reuters, former racecar driver Niki Lauda, who founded Niki, may still be interested in buying the airline back.
"The end of Niki is a national disaster", said Oliver Lackmann, the managing director, after Lufthansa blamed competition concerns from...
The European Commission "has clearly indicated that an acquisition of Niki and its integration into the Eurowings group would now not be approved", even with previous concessions on takeoff and landing times, Lufthansa said.
Lufthansa said it still planned to buy Air Berlin subsidiary LGW and would submit a revised proposal, including foregoing slots, to the Commission on Wednesday.
Lufthansa will likely still be able to expand its market position even without the Niki deal.
Lufthansa said on Wednesday it still meant to pursue growth plans for its Eurowings budget subsidiary and would apply for any Niki slots that become free in the event of an insolvency.
"(From a financial point of view), this leads to a comparable result for the Lufthansa Group", it said. Lufthansa said it will now stop financing Niki, which it had been keeping afloat at a cost of about €10 million a week since August. Lufthansa's purchase of LGW would generate €18 million to be applied to repaying the German government loan, Air Berlin also said. That would leave the German government almost 100 million euros short.