In a stock market filing Tuesday, Air Berlin said it had filed for bankruptcy protection after its main shareholder, Gulf carrier Etihad, had withdrawn funding for Air Berlin.
Under these circumstances, Air Berlin had come to the conclusion that there was no “positive prognosis for continuing the airline,” the filing said. It added that two members of the board of directors, who joined after being nominated by Etihad, had resigned.
Etihad said in a statement Tuesday Air Berlin’s filing for insolvency was “disappointing” for both sides. It noted that it had granted ample financial aid to the carrier over the past six years, with Air Berlin receiving another 250 million euros ($293 million) in April to keep afloat.
However, the airline requested the right to carry out insolvency proceedings under its own management, which would “facilitate negotiations with Lufthansa and other interested parties about a possible sale of Air Berlin operations,” the airline said.
Berlin will support the plan with a bridge loan of 150 million euros, ensuring that Air Berlin flights will continue according to schedule.
“We’re in a time when many tens of thousands of travelers and vacationers are in multiple international holiday spots,” the German Economics Ministry and Transportation Ministry said in a joint statement. “Otherwise the return flights of these travelers back to Germany with Air Berlin would not have been possible.”
The government funding also makes sure that Air Berlin aircraft currently under lease from rivals Eurowings and Austrian Airlines can stay in operation.