German airline group Deutsche Lufthansa AG (DLAKF, DLAKY) will sign a deal on Thursday to buy parts of insolvent rival Air Berlin, reports said, citing Lufthansa's chief executive Carsten Spohr.
While Air Berlin and Lufthansa's low-priced branch Eurowings are the only carriers serving routes such as between Munich and Cologne, Spohr said the deal won't mean rising prices as competition "will intensify in Europe and worldwide".
"This is indeed a big day, which we're going to seal with a signature in a few hours", Spohr said, sending Air Berlin's shares rocketing up by 51 percent in early morning trading on the Frankfurt Stock Market.
In 2016, Air Berlin showed a record 782 million euros in losses - a 75 per cent increase compared to 2015 - which the company attributed to restructuring costs and depreciation.
It has been in talks for weeks with Lufthansa and easyJet about selling parts of its business.
EasyJet reportedly has been discussing acquiring 27 to 30 planes.
It said late last month that negotiations with Lufthansa and Britain's easyJet would continue until October 12.
Air Berlin has kept flying since August as a result of the German government providing it with a bridging loan of 150 million euros. "The deal with Lufthansa is done, there is agreement", an inside source told Reuters on Wednesday.
Air Berlin's long-haul flights will cease at the end of this week, and tickets for all flights from the end of this month will be invalid.