Lufthansa (DLAKF) and Ryanair   (RYAAY) could be the big winners following the collapse of Air Berlin, one of Europe's biggest carriers, with both airlines poised to pick up short-haul market share into and out of Germany.

Air Berlin declared bankruptcy on Tuesday, August 15, after Middle Eastern backer Etihad Aviation Group pulled finance guarantees. Germany's No.2 Airline will keep flying for the time being after its larger domestic rival Lufthansa and the German government stepped in to prevent a complete collapse.

Air Berlin plc shares traded in the early afternoon Wednesday at €0.414 ($0.48), down 18% on the day and 46% since news of the bankruptcy broke on Tuesday. Lufthansa shares were back to Tuesday's closing price of €20.66 after an initial surge of almost 1%. Ryanair was up 1.2% on Wednesday to €19.44 and has climbed 4.7% over two days.

"We see Lufthansa and Ryanair as the biggest potential beneficiaries from possible reduced supply in the medium term...with other European airlines also benefiting from better short-haul supply and demand," wrote Goldman Sachs analysts including Daniil Federov and Patrick Creuset. "In the long term, we believe that legacy exits in Europe should support market share gains for LCCs (low cost carriers) and for Ryanair in particular."

Air Berlin has about 3.4% of Europe's short-haul market and 13% of the German market. Its collapse means that about 5% of Europe's short-haul capacity is now operated by bankrupt carriers, after Italy's Alitalia tumbled into administration in May when its employees rejected a restructuring plan. Alitalia is 49% owned by Etihad.

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