Etihad studies options for Niki airline
dubai — Etihad Airways said on Tuesday it continues to explore options for leisure airline Niki which it bought from airberlin for $351 million earlier this year.
Etihad agreed to buy Niki as part of a deal to create a holiday airline in a joint venture with TUI Group. Those talks fell apart in June. Earlier on Tuesday, airberlin said it had filed for insolvency. Niki is not part of the insolvency proceedings. — Reuters
dubai — Airberlin’s Tuesday filing for insolvency is “extremely disappointing”, Etihad Airways said in a statement.
On Tuesday, discount carrier airberlin Plc filed for insolvency in a local Berlin court, the same day the airline said it was in talks with Lufthansa over the larger German airline buying parts of its business.
“We have been informed that airberlin has filed for administration,” Etihad said in a statement.
“This development is extremely disappointing for all parties, especially as Etihad has provided extensive support to airberlin for its previous liquidity challenges and restructuring efforts over the past six years.”
In April this year, Etihad provided €250 million in additional funds to airberlin, as well as offer support for the airline to “explore strategic options” for the business. “However, airberlin’s business has deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges and from implementing alternative strategic solutions,” Etihad added.
“Under these circumstances, 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.” Etihad noted that airberlin operations are expected to continue during administration, and that the Abu Dhabi-based carrier has a commercial relationship with airberlin across a number of areas, including codeshare operations. “We will support airberlin’s management during these difficult times,” the statement added. “Germany is an important market for Etihad and Abu Dhabi, and we remain committed to providing comprehensive air links as a key enabler of trade and tourism.”
Airberlin, for its part, confirmed that flights would continue, and in a joint Germany’s economy and transport ministries said they were providing an €150 million ($176.16 million) bridging loan, which will be made available by KfW (the state development bank) and backed by a federal guarantee. The ministries
Etihad is arguably free from Air Berlin, it can get back to business as it looks to turn around its losses Saj Ahmad, Analyst, StrategicAero Research
also said they expected a decision from Lufthansa and another airline concerning the sale of parts of the business in coming weeks.
Saj Ahmad, an analyst with the London-based StrategicAero Research, said that airberlin’s collapse “underscores the immense difficulties and challenges that Etihad endured in trying to get the airline to restructure, change and become a viable competitor to Lufthansa.” Ahmad added that it appears that Etihad is “re-evaluating its position and is probably better off concentrating on its own organic expansion, as opposed to being sidetracked by equity stakes that have not delivered the rewards that had been envisioned.”
“With that in mind, the new leadership at Etihad, in my mind, has to wipe the slate clean from this sort of troublesome exposure and get back to showcasing Etihad’s premium offerings, which are undeniably beyond the rest of it’s rivals,” he added. “It’s a bad day in the Etihad office, that’s for sure, but now Etihad is arguably free from Air Berlin, it can get back to business as it looks to turn around its losses.”
— business@khaleejtimes.com