Airberlin Files for Bankruptcy; Lufthansa Could Buy Airline
- Author: Neal Todd Aug 16, 2017,
Aug 16, 2017, 6:50
Air Berlin has booked losses of 1.2 billion euros over the past two years and depended on Etihad's funding. The Federal Government is supporting airberlin with a bridging loan to maintain flight operations for the long-term.
Air Berlin submitted the insolvency filing in a local Berlin court, though it said it won't seek bankruptcy protection for the Niki Luftfahrt GmbH and Leisure Cargo GmbH units.
The airline is in advanced talks with rival Lufthansa for the sale of some aspects of its business as it already leases aircraft to the German flag carrier.
Given the situation, CEO of Air Berlin Thomas Winkelmann said that "we are working tirelessly to achieve the best possible outcome for the company, our customers and employees".
Ryanair complained to the European Commission and Germany's competition regulator, the Bundeskartellampt, that the government and Lufthansa were conspiring to carve up Air Berlin while excluding competitors and ignoring anti-trust and state aid rules.
In a statement, Etihad said the company had "deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges and from implementing alternative strategic solutions".
Negotiations between airberlin and Lufthansa among others are continuing and are expected to finalize.
Analysts said that a Lufthansa takeover would indeed mainly be to thwart the likes of Ryanair.
On Germany's DAX index of leading firms, Lufthansa soared to the top of the leaders board, rising 4.73 percent to 20.59 euros at the close.
"Our priority now lies with securing the jobs", said Christine Behle, a union board director.
Trading in Air Berlin shares was suspended on the Frankfurt Stock Exchange.
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. Etihad's then-chief James Hogan said at the time that his company wasn't prepared to carry on in investing without the support of all stakeholders.
Air Berlin is flying from Berlin and Dusseldorf.
It welcomed the government's help in minimising the disruption over the coming months, but it accused Etihad of making the wrong strategic and management decisions and turning its back on Air Berlin workers.