Germany’s second largest airline, airberlin, filed for bankruptcy on Tuesday following heavy financial losses after major shareholder Abu Dhabi-owned Etihad Airways withdrew its funding.
It has been reported that Berlin has granted a loan of €150m (US$176m) which will allow Air Berlin to keep its operation going for three months, temporarily securing 7,000 jobs.
Reuters reports that the airline is in talks with Lufthansa and another airline about selling its assets, with a decision expected “in the coming weeks”.
A statement on the airberlin website read: “airberlin has today, 15 August 2017, filed to commence insolvency proceedings under the self-administration at the District Court of Berlin-Charlottenburg, in order to continue with the restructuring process that is already underway.
“The Federal Government, Luftansa, and other partners are supporting airberlin in its restructuring efforts. The Federal Government is supporting airberlin with a bridging loan to maintain flight operations for the long term.
“This means: all flights operated by airberlin and NIKI will continue as planned; the flight schedule remains valid; bookings remain valid; all flights can still be booked.”
Meanwhile, a statement released by Etihad Airways read: “We have been informed that airberlin has filed for administration.
“This development is extremely disappointing for all parties, especially as Etihad has provided extensive support to airberlin for its previous liquidity challenges and restructuring efforts over the past six years.
“In April this year, Etihad provided EUR 250 million of additional funding to airberlin as well as supporting the airline to explore strategic options for the business. However, airberlin’s business has deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges and from implementing alternative strategic solutions.
“Under these circumstances, as a minority shareholder, Etihad cannot offer funding that would further increase our financial exposure. We remain open to helping find a commercially viable solution for all parties.
“We expect airberlin operations to continue during administration. We have a commercial relationship with airberlin across a range of areas, including codeshare operations, and we will support airberlin’s management during these difficult times.
“Germany is an important market for Etihad and Abu Dhabi, and we remain committed to providing comprehensive air links as a key enabler of trade and tourism.”
