airberlin Applies For Bankruptcy Protection

August 15, 2017

Bookmark and Share

Germany’s second largest airline airberlin has started insolvency proceedings “under self-administration” to allow it to restructure under bankruptcy protection.

The airline applied to the local District Court in Berlin-Charlottenburg for provisional insolvency proceedings after major shareholder Etihad declined to continue financial support for the loss making German carrier.

airberlin has made annual losses in all but one year since 2008, with financial year 2016’s loss ballooning out to €781.9 million (USD$921.3 million).

airberlin’s chief executive Thomas Winkelmann said in a statement the airline is “working tirelessly to achieve the best possible outcome for the company, our customers and employees, given the situation.”

The German government has approved a EUR€150 million loan to allow the airline to continue flying for three months while negotiations are completed on its future.

Germany’s largest airline Lufthansa said it is supporting the restructuring efforts of the airline jointly with the German Government.

Lufthansa said it is in negotiations with airberlin to take-over parts of the bankrupt airline and is looking at taking on additional staff.

Lufthansa, which currently wet leases aircraft from airberlin for its Eurowings and Austrian Airlines units, said the leases will continue operating as agreed.

Abu Dhabi’s Etihad Airways bought a stake of just under 30 percent in airberlin in 2011 as it looked to build minority stakes in a number of airlines. But with two of the investments, in Italy’s Alitalia and now airberlin in administration, the UAE airline has decided to end its financial support for the German carrier.