airberlin files for insolvency

airberlin files for insolvency

airberlin began bankruptcy protection proceedings in a German court this morning (Tuesday), after key shareholder Etihad Airways withdrew funding.

Germany’s second-largest airline made the filing at the Amtsgericht District Court of Berlin-Charlottenberg, so that it can continue restructuring.

It is being supported by the German government, which has granted the airline a bridging loan of 150m euros to allow it to keep its planes in the air for three months and to protect the jobs of 7,200 German workers, according to Reuters.

According to a statement on airberlin’s website today, the loan means that all airberlin- and NIKI-operated flights will continue as planned, flight schedules and bookings are still valid, and people can still book flights.

Lufthansa and other, unspecified partners are also supporting airberlin’s restructuring efforts. Lufthansa says that aircraft it has leased from airberlin to provide flights for Eurowings and Austrian Airlines “can continue to be operated as before”.

Lufthansa is already negotiating with airberlin to buy parts of it, and Lufthansa says it “intends to lead these negotiations to a fast and positive result”.

Airberlin describes the negotiations as “far advanced and highly promising”, and says they may be finalised “shortly”.

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

Airberlin’s stock price dropped by 47.3% earlier in the day, but recovered slightly, ending the day 32% down on the start of the day.

Etihad, which has a 29.21% share in airberlin, has notified the company that it will no longer provide it with financial support. Etihad bought a stake in airberlin in 2011, and provided 250m euros in April.

But, according to Reuters, the Abu Dhabi-based airline has been reviewing its European investments after they failed to generate expected profits.

Elizabeth Eyre
By Elizabeth Eyre August 15, 2017 17:30