Air Berlin Files for Bankruptcy as Etihad Pulls Funding

Germany’s second largest carrier, Air Berlin, is filing for bankruptcy after its main shareholder, Abu Dhabi-based Etihad, said it would make no more financing available.

The airline said Tuesday in a statement that after Etihad pulled funding, it “came to the conclusion that there was no further positive way ahead for Air Berlin,” Germany’s dpa news agency reported.

The Economy Ministry and Transport Ministry immediately announced in a joint statement to allay travelers’ fears that they could be stranded on summer holiday, saying the government would provide a loan of 150 million euros ($177 million) so the airline it can continue flights for the time being.

“We’re in a time when many tens of thousands of travelers and vacationers are in multiple international holiday spots,” the ministries said.

“The return flights of these travelers back to Germany with Air Berlin would not have been otherwise possible.”

Loss-making Air Berlin has been restructuring to try and stay in business and has been kept aloft in recent years by Etihad, which holds a 29.2 percent share.

In December, German rival Lufthansa’s Eurowings and Austrian Airlines units reached a deal to lease 38 planes from Air Berlin.

Following the bankruptcy announcement, Lufthansa said it was “supporting the restructuring efforts of the airline jointly with the German government” and that its leased aircraft would continue operating as before.

Lufthansa, Germany’s largest airline, said it was “already in negotiations with Air Berlin to take over parts of the Air Berlin group and is exploring the possibility of hiring additional staff.”

The ministries said Air Berlin had been in negotiations with Lufthansa “and another airline” for a long time.

“Securing the flight operations and the ongoing positive contract negotiations with other airlines to work together with Air Berlin to continue the flight operations under different ownership were the main reasons for the government’s decision to provide a bridge loan,” the ministries said.

This article was written by David Rising from The Associated Press and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].