Air Berlin collapse as Etihad withdraws financial support

Lucy Hill
August 16, 2017

"All flights operated by Air Berlin and [Austrian subsidiary] Niki will continue as planned", it said.

The German government has had to step in with a loan of €150 million (£136 million) so that flights can keep running for the next three months.

German carrier Air Berlin's aircrafts at Tegel airport in Berlin, Germany, September 29, 2016.

National carrier Lufthansa appears to be looking to take control of at least part of Air Berlin. "These negotiations may be finalised shortly", the statement added.

Ryanair has launched complaints with competition authorities in Germany and the European Union over Lufthansa's involvement in the administration of Air Berlin.

The airline, which has accumulated debt for nearly a decade, reported a record loss of 782m euros (£713m) in 2016.

For example, Alitalia and Air Berlin each have an 18.85% exposure of the overall principal in the first EA Partner bond that was issued.

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Machnig also said the German government's decision to grant a bridge loan was the right move since there wouldn't have been enough capacity to fly home thousands of vacationing Air Berlin customers on short notice. However, it is unlikely to countenance a full takeover: Air Berlin operates a large Airbus fleet similar to easyJet's but also has more than 100 Boeing planes, as well as high costs and pension liabilities.

Air Berlin said two members of its board of directors who had been nominated by Etihad had resigned.

The pilots' union Cockpit said the Air Berlin news came as "a shock".

The German transport and economy ministries said Air Berlin had been in negotiations with Lufthansa "and another airline" for a long time.

It said it pumped 250 million euros of additional funding into Air Berlin as recently as in April and helped it "explore strategic options" for its business. The state-owned Mideast carrier's links to Germany, which include a code-share agreement with Lufthansa, remain important and it is ready to assist in finding a "commercially viable" solution for Air Berlin, according to an emailed release.

Etihad said the airline's business had "deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges".

Other reports by TheDailyFarc

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