Air Berlin files for bankruptcy after shareholder pulls plug

BERLIN — Germany’s second largest airline, Air Berlin, has filed for bankruptcy protection after its main shareholder, Abu Dhabi-based Etihad, said it would make no more financing available following years of unsuccessful turnaround attempts.

The airline, which carries some 80,000 people a day mostly on short-haul destinations, will get a 150 million euro ($177 million) government loan to keep flights running and not leave travellers stranded during the peak summer season.

“We’re in a time when many tens of thousands of travellers and vacationers are in multiple international holiday spots,” the German Economy and Transport Ministries said in a statement Tuesday. “The return flights of these travellers back to Germany with Air Berlin would not have been otherwise possible.”

The loan will allow Air Berlin to operate until the end of November, CEO Thomas Winkelmann said.

After that the airline’s future is uncertain. Rival Lufthansa, which is Germany’s biggest carrier, and another unidentified airline are in talks to take over some operations. Winkelmann said the talks were “very well advanced.”

Union ver.di called the bankruptcy a “severe blow” for Air Berlin’s more than 7,000 employees.

“Our priority now lies with securing the jobs,” said Christine Behle, a union board director.

Economy Minister Brigitte Zypries said that the bridge loan should give Air Berlin enough time to wrap up talks on the sale of some operations.

The bankruptcy filing was prompted by the decision by Etihad, which holds a 29.2 per cent stake, to stop funneling money into the airline after years of propping it up.

Air Berlin said that in light of Etihad’s decision, it “came to the conclusion that there was no further positive way ahead for Air Berlin.”

Etihad Airways said the bankruptcy filing was “extremely disappointing for all parties,” especially as it had supported the airline over six years.

“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,” it said.