Thomas Cook ready to play active role in Air Berlin's future

Chelsea West
August 16, 2017

Air Berlin, Germany's second-largest airline, filed for bankruptcy protection on Tuesday after key shareholder Etihad Airways withdrew funding following years of losses.

Air Berlin said it's now in talks with German flag carrier Lufthansa for parts of its business.

"To keep Air Berlin's flight operations going, the government has chose to grant a bridging loan for 150 million euros", she told reporters.

At a news conference, Germany's Economy Minister, Brigitte Zypries, said the government's emergency loan should allow flights at the airline to continue for three months. "These negotiations may be finalised shortly", the statement added.

EasyJet could spread its wings in Germany as it emerged as a potential buyer for parts of Air Berlin, which filed for administration on Tuesday.

Air Berlin has booked losses of 1.2 billion euros over the past two years and depended on Etihad's funding.

The carrier was sustained by its main shareholder Etihad which owns 29.2 percent of the company's stock since 2011.

Germany's second-biggest airline on Tuesday filed for insolvency after its majority shareholder made a decision to withdraw its financial support.

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"As a minority shareholder, Etihad can not offer funding that would further increase our financial exposure".

The federal ministry of transport and digital infrastructure says it has provided a loan of €150 million ($176 million) through German bank KfW as Air Berlin would have otherwise been required to immediately suspend operations.

Union ver.di called it a "severe blow" for the more-than 7,000 employees of Air Berlin. Lufthansa and airberlin already have an agreement whereby airberlin leases aircraft to provide flights for Lufthansa budget airline, Eurowings.

Lufthansa confirmed it is now in negotiations with Air Berlin and is "exploring the possibility of hiring additional staff".

News agency Bloomberg estimates that Air Berlin has burnt through nearly €2 billion in six year.

This past April Etihad injected another €250 million into Air Berlin to support its most recent turnaround efforts.

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

Other reports by TheSundaySentinel

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