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airberlin Flies On…

Photo: The German carrier filed for insolvency after shareholder Etihad Airways withdrew financial support. (airberlin)

 

Airberlin has vowed to continue operations after filing for insolvency.  The ailing German carrier, which posted a €782m loss last year, confirmed on August 15 it had filed to commence proceedings under self-administration at the Berlin-Charlottenburg District Court as it continues to push ahead with its restructuring programme.

Announcing the decision, airberlin CEO Thomas Winkelmann said: “We are working tirelessly to achieve the best possible outcome for the company, our customers and employees, given the situation.”

Etihad, which owns a near-30% stake in airberlin, invested a further €250m into the German carrier earlier this year. (airberlin)

Airberlin’s filing came after Abu Dhabi-based Etihad Airways, which owns a near-30% stake in its German counterpart, confirmed it had withdrawn financial support for the carrier.  A spokesman for the UAE national airline said the insolvency “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.”

Etihad had invested an additional €250m into airberlin as recently as April as part of a wider-reaching turnaround plan, but said the Berlin-based business “has deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges and from implementing alternative strategic solutions.”  It added: “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.”

Airberlin confirmed its services, as well as those of Vienna-based subsidiary Niki and wet-lease operations to Lufthansa offshoots Eurowings and Austrian Airlines, will continue as planned, and tickets can still be purchased.  Operations are being funded initially via a €150m bridging loan supplied by the Federal German Government, which is expected to support the carrier for the next three months while efforts are made to secure a longer-term arrangement.

The Federal German Goverment has granted airberlin a €150m bridging loan to cover operations over the next three months. (airberlin)

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