Bleeding financially from competition over similar routes, Hamburg-Amerikanische Packetfahrt (HAPAG) and Norddeutscher Lloyd (NDL) elect to merge their airline operations on February 6, 1923. Deutscher Aero Union, A. G. and Lloyd Luftdienst, GmbH. each take half interest (amounting to capitalization of 100 million reichmarks) in the new Deutscher Aero Lloyd, A. G. They contribute all of their equipment, facilities, personnel, and airline shares, including the former carriers Deutsche Luft Reederei, GmbH., Lloyd Luftverkehr Sablatnig, GmbH., Deutscher Lloyd Luft, GmbH., and Lloyd Ostflug, GmbH.
The two carriers also agree to merge their Danzig affiliates; Danziger Lloyd Luftdienst, GmbH. and Danziger Luft Reederei, GmbH. become Danziger Aero Lloyd, A. G. Although HAPAG and NDL remain as backers, AEG now withdraws and is replaced by the Deutsche Bank, whose representative, Dr. Kurt Weigeit, is a major force behind the amalgamation.
Employing some 19 modified Fokker F-IIs (Fokker-Grulich F-II) and an uncertain number of Dornier Komet IIs and IIIs received from Deutsche Luft Reederei, GmbH., DAL resumes domestic flights over rationalized portions of the old routes, featuring operations to the Leipzig Trade Fair.
On April 23, the previously flown Rotterdam-Copenhagen service, pooled with KLM (Royal Dutch Airlines, N. V.) and DDL Danish Airlines, A. S., is restarted. Seven days later, a joint London-Berlin via Amsterdam, Bremen, and Hamburg, weekly service is launched in cooperation with The Daimler Airway, Ltd.; DAL begins flying the service on May 21.
In March 1924, Dornier Komet IIs inaugurate Berlin-Vienna service via Dresden and Prague. Later, Dornier C-II Dolphins are employed to initiate a trans-Baltic night service from Wernemunde-Stockholm via Karlshamn. Three Udet U-8s are received and two (D-417 and D-483) are christened Linde (Lime Tree) and Blindschleiche (Blind Worm) is introduced on the Bremen to Hanover route, as well as on flights from Munich to Berchtesgaden, Hanover to Hamburg, and Munich to Partenkirchen via Garmisch.
On May 24, the Condor Syndikat is formed at Berlin; created to support the sale of German civil aircraft overseas, it has DAL backing.
On April 15, 1925, DAL becomes the first German airline to open service to Italy as a Komet III arrives at Milan from Berlin following a
Munich stop; the event also marks the first time a commercial airliner has flown over the Alps.
Competition between DAL and the Junkers Luftverkehr, A. G. is ferocious during these years and the drain on state, municipal, and private funds for subsidies become burdensome. On May 7, Junkers proposes the creation of a super-consortia, the Europa-Union, to unite both its Trans-Europa and Ost-Europa groups.
Scheduled service between Berlin and Moscow is realized on June 15 when DAL inaugurates a scheduled service from the German capital to the East Prussian city of Konigsberg, where a connection is made with the Deutsche-Russische Luftverkehrs, A. G. (Deruluft) route into Russia.
A meeting of the 16 airlines to be involved in the Europa-Union takes place in Berlin on September 7. The aviation department of the German Transport Ministry disallows this move, viewing it as an attempt by the manufacturer to increase its power over the airline industry. This government bureau assumes 80% control of Junkers Luftverkehr, A. G. in October. At approximately the same time, Deutsche Bank/Deutsche Petroleum official Weigelt, who had assisted in the creation of DAL and with cooperation with Ernst Brandenburg, GTM aviation bureau chief, prepares a pamphlet entitled Fusion in the Field of Air Traffic, which recommends a Junkers/DAL merger.
Merger negotiations proceed and, on January 6, 1926, the two corporate carriers are merged into a new national airline, Deutsche Luft Hansa, A. G. (DLH).
