Officials doubt Air Berlin can continue in present form

BERLIN (Reuters) - The prospects for maintaining insolvent airline Air Berlin or its existing route network as a coherent whole appeared to be receding after officials warned that the airline was not viable and that a straight takeover would raise competition concerns.

A takeover of Air Berlin as a whole to keep it operating would not be possible, German deputy economy minister Matthias Machnig said on Saturday, pouring cold water on one airline investor's approach.

"The model of Air Berlin as an independent airline has failed," he told German radio station rbb InfoRadio on Saturday.

Germany's Hans Rudolf Woehrl, who made a name for himself when he bought German airline Deutsche BA from British Airways for 1 euro, threw his hat in the ring for Air Berlin on Friday and said he wanted to keep it flying after buying it.

Separately, the head of Germany's advisory Monopoly Commission said that allowing Germany's flag carrier Lufthansa to take over Air Berlin's route network would render large numbers of German domestic routes uncompetitive.

Monopoly Commission President told Die Welt newspaper in an interview that while the increased international market share for Lufthansa would be welcome, "it would not be persuasive if this were achieved by dispensing with competition on German routes."

His remarks appear to be at odds with the views of German federal transport minister Alexander Dobrindt, who has called for the creation of a German airline "national champion" - a turn of phrase which Die Welt said had also set alarm bells ringing in Brussels.

Talks on carving up Air Berlin, which said on Tuesday it was filing for insolvency, started on Friday, with Lufthansa getting the first meetings ahead of other potential bidders.

Earlier in the week, a source familiar with the matter said easyJet was among those in talks, and Thomas Cook's German airline Condor said it was ready to play "an active role" in Air Berlin's restructuring.

Deputy Economy Minister Machnig said it would take several investors to offer Air Berlin and its employees a long-term future, reiterating that Lufthansa would not be the only buyer of the carrier's assets.

He dismissed a complaint by Ryanair over the handling of the insolvency process, which its Chief Executive Michael O'Leary describes as a "conspiracy", saying O'Leary was welcome to play a role in Air Berlin's restructuring.

"I am entirely willing to discuss the matter," Machnig said.

(Reporting by Gernot Heller and Thomas Escritt; Writing by Maria Sheahan; Editing by Toby Chopra)