Lufthansa is keen to buy airberlin's Niki

As part of a restructuring earlier this year, airberlin transferred leisure routes to tourist destinations in Spain and Greece to its Austria-based unit Niki.

Lufthansa has submitted a letter of interest in airberlin's Niki unit and other parts of the insolvent carrier, a source familiar with the talks said on Wednesday.

Airberlin, which is being kept in the air thanks to a ?150 million ($177 million) government loan, has been in talks with interested parties since last week, when it filed for insolvency after major shareholder, Gulf carrier Etihad, said it would no longer provide funding.

Part of airberlin's appeal to bidders lies in its access to take-off and landing slots at airports such as Duesseldorf in Germany's most populous region.

As part of a restructuring earlier this year, airberlin transferred leisure routes to tourist destinations in Spain and Greece to its Austria-based unit Niki, founded by former F1 driver Niki Lauda. Analysts at Goodbody said buying Niki would strengthen Lufthansa's position against Ryanair on such routes.

For 2017, Lufthansa Group, including budget unit Eurowings, has a market share of about 22.4 per cent on Germany-Spain routes, against 16.4 per cent for Ryanair.

Lufthansa is unlikely to be able to buy all of airberlin for competition reasons. Together, the two would control around 95 per cent of German domestic routes, for example.

Ryanair CEO Michael O'Leary told Reuters on Tuesday he would be interested in a bid for airberlin as a whole, but complained Ryanair hadn't been invited to the process, which he sees as heavily favouring Lufthansa.

German aviation investor Hans Rudolf Woehrl, who wants to buy airberlin as a whole, has also criticised the process, saying he was not invited to bid.
Another source familiar with the matter said Thomas Cook's German airline Condor is also part of the negotiations. It was not immediately clear which assets Condor was interested in. - Reuters