Air Berlin A320 Aircraft taking off

Air Berlin files for insolvency but flights continue

Air Berlin, Germany’s second-largest carrier, has filed for insolvency, after its main shareholder Etihad declared it would not be providing further financial support. The airline, which has accumulated debt for almost a decade, reported a record loss of €782m in 2016. 

Flights will continue to operate thanks to a transitional loan of €150m from the German government. Its main rival, Lufthansa, is in talks to buy part of the Air Berlin Group. 

The insolvency was caused by Etihad Airways’ abandonment of its strategy of investing money in loss making airlines such as Air Berlin and Alitalia

The German government is now supporting the airline with a bridging loan of 150m Euros. 

Both easyJet and Ryanair are looking to exploit and opportunity to pick up the pieces of the failed airline, coveting the precious slots at the large German airports which will become available as a result. However, Ryanair suggests there is “an obvious conspiracy” to deliver Air Berlin on a debt-free basis to national-flag carrier Lufthansa and has demanded that state-aid rules are followed to avoid a stitchup by the German governmental. 

But, the prize appears to have moved out of reach of some international rivals after Lufthansa, Germany’s biggest carrier, emerged on Tuesday as leading talks to rescue its rivalAir Berlin, which is Germany’s second-biggest airline.

The slot situation at Dusseldorf Airport is the reason the break-up of Air Berlin is being watched closely by airlines. It says that should there be a straight transfer of Air Berlin routes to Lufthansa, the flag carrier would gain an enviable position in one of Germany’s wealthiest regions. More than 18m people live within 100 kilometres

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