Air Berlin files for bankruptcy

Lufthansa and German government to support restructuring of airberlin

Lufthansa and German government to support restructuring of airberlin

"That Etihad has taken a massive financial hit in its earnings a few weeks ago highlights to good effect why they were not prepared to bail out the airline any more", he said.

"All flights operated by Air Berlin and [Austrian subsidiary] Niki will continue as planned", it said.

In a surprise announcement, the airline said it had filed for insolvency with the court of Berlin-Charlottenburg after Etihad "notified Air Berlin PLC of the fact that it will not provide any further financial support to the Air Berlin group". Etihad, the United Arab Emirates' carrier, bought a 29 percent stake in Air Berlin in 2012 as a means of funneling European passengers through its Abu Dhabi hub.

The airline, which has accumulated debt for nearly a decade, reported a record loss of 782m euros (£713m) in 2016. Etihad has been propping up the ailing airline for the last six years and injected £227mn in April.

Loss-making airline airBerlin is seeking protection from its creditors and has launched insolvency proceedings.

Germany's giant services-sector union Verdi responded with dismay to Air Berlin's decision to file for administration.

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Air Berlin chief executive Thomas Winkelmann states: "We are working tirelessly to achieve the best possible outcome for the company, our customers and employees, given the situation". "We remain open to helping find a commercially viable solution for all parties", it said.

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.

Etihad also stopped funding another airline in which it invested, Italy's Alitalia, in May.

Germany flag-carrier Lufthansa is supporting the restructuring efforts of the airline jointly with the German authorities.

"Negotiations with Lufthansa and other partners regarding the acquisition of business units of Air Berlin are far advanced and highly promising". "We have a commercial relationship with airberlin across a range of areas, including codeshare operations, and we will support airberlin's management during these hard times".

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