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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 euros (£713m) in 2016.

Flights will continue to operate thanks to a transitional loan of 150m euros from the German government.

Its main rival, Lufthansa, is in talks to buy part of the Air Berlin Group.

Air Berlin's passenger numbers have been in freefall: in July, the airline lost a quarter of its customers compared with the previous year.

The carrier has also been plagued by delays and cancellations, for which it has been forced to pay millions of euros in compensation.

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.

Flights at Air Berlin's low-cost subsidiary airline Niki are also continuing as normal.

Ms Zypries said discussions between Air Berlin and Lufthansa were going well, and a deal whereby Lufthansa takes over part of the insolvent airline should be struck in the next few months.</s>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 loss-making 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, its 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. “Air Berlin must proceed with transparency and provide all important information.”

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.”

Already the carrier had been trying to ease its costs and lighten its debt load of 1.2 billion euros after reporting a record loss of 782 million euros last year. In December, it reached a deal to lease 38 plans to Lufthansa’s units Eurowings and Austrian Airlines.

Etihad Airways said the bankruptcy filing was “extremely disappointing for all parties,” especially as it had supported the airline over six years, but that it could not continue pumping money into a loss-making business.

“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.

It said it had injected 250 million euros of additional funding into Air Berlin as recently as April and helped it “explore strategic options” for its business. But it said the carrier’s business “deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges and from implementing alternative strategic solutions.”

Shares in Air Berlin plunged 34 per cent on Tuesday to 51 euro cents.

The Emirati national airline said it continues to have codeshares and other business relationships with Air Berlin and will support its management.

Air Berlin’s decision comes three and a half months after another Etihad-backed European carrier, Alitalia, entered its second round of bankruptcy protection in a decade.

Etihad said at the time that Alitalia needed a “fundamental and far-reaching restructuring” and it was not prepared to keep pumping money into the struggling Italian airline.

Kirsten Grieshaber and Frank Jordans in Berlin, and Adam Schreck in Dubai contributed to this story.</s>BERLIN (AP) - Germany on Wednesday rejected a claim by budget airline Ryanair of a "conspiracy" behind efforts to keep bankrupt rival Air Berlin afloat until a new owner is found.

The Irish airline lodged a complaint with European Union competition authorities after Air Berlin filed for bankruptcy protection and then got a 150 million euro ($177 million) loan from the German government.

Ryanair said late Tuesday there's "an obvious conspiracy" between the German government, Lufthansa and Air Berlin. The loan will help Air Berlin to keep flights running for the next three months, while it is negotiating a possible deal with Lufthansa and another unnamed carrier, reported by German media to be easyJet.

FILE - In this Oct. 5, 2016 file photo, a plane of the Air Berlin company flying above the town of Wustermark, Germany. Struggling German carrier Air Berlin says it's filing for bankruptcy after its main shareholder, Abu Dhabi-based Etihad, said it would make no more financing available. The Economy Ministry and Transport Ministry said Tuesday Aug. 15, 2017 in a statement that the airline would get a loan of 150 million euros ($177 million) so that it can continue flights for the time being. (Ralf Hirschberger/dpa via AP,file)

A spokeswoman for Germany's Economy Ministry said it was "absurd" to claim that the rescue package had been staged. Beate Baron told reporters in Berlin that the government expects the loan to Germany's second-largest airline to be repaid.

Air Berlin filed for bankruptcy protection Tuesday 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, made a loss of about 782 million euros last year.</s>BERLIN (AP) - Germany's second largest carrier, Air Berlin, is filing for bankruptcy protection after its main shareholder, Abu Dhabi-based Etihad, said it would make no more financing available.

The loss-making airline said Tuesday that after Etihad pulled funding, it "came to the conclusion that there was no further positive way ahead for Air Berlin."

To allay travelers' fears that they could be stranded on summer holiday, the German government immediately said it would provide a loan of 150 million euros ($177 million) so the airline it can continue flights for the time being.

FILE -In this Sept. 29, 2016 file photo shows an aircraft of the Air Berlin company on the runway of Dusseldorf airport in Germany. Struggling German carrier Air Berlin says it's filing for bankruptcy after its main shareholder, Abu Dhabi-based Etihad, said it would make no more financing available. The Economy Ministry and Transport Ministry said Tuesday Aug. 15, 2017 in a statement that the airline would get a loan of 150 million euros ($177 million) so that it can continue flights for the time being. (Bernd Thissen/dpa via AP,file)

"We're in a time when many tens of thousands of travelers and vacationers are in multiple international holiday spots," the Economy and Transport ministries said in a statement. "The return flights of these travelers back to Germany with Air Berlin would not have been otherwise possible."

Economy Minister Brigitte Zypries later told reporters the money was expected to last for three months.

Union ver.di called it a "severe blow" for the more-than 7,000 employees of Air Berlin.

"Our priority now lies with securing the jobs," said Christine Behle, a union board director. "Air Berlin must proceed with transparency and provide all important information."

Air Berlin has been posting losses for years. It has been restructuring its operations and has been kept aloft in recent years by Etihad, which holds a 29.2 percent stake.

In December, German rival Lufthansa's Eurowings and Austrian Airlines units reached a deal to lease 38 planes from Air Berlin.

Following the bankruptcy announcement, Lufthansa said it was "supporting the restructuring efforts of the airline jointly with the German government" and that its leased aircraft would continue operating as before.

Lufthansa, Germany's largest airline, said it was "already in negotiations with Air Berlin to take over parts of the Air Berlin group and is exploring the possibility of hiring additional staff."

Zypries said that the bridge loan "should give enough time for the negotiations to be brought to a conclusion."

The German transport and economy ministries said Air Berlin had been in negotiations with Lufthansa "and another airline" for a long time.

Etihad Airways said the bankruptcy filing was "extremely disappointing for all parties," especially as it had supported the airline over six years, but that it could not continue pumping money into a loss-making business.

"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.

It said it pumped 250 million euros of additional funding into Air Berlin as recently as in April and helped it "explore strategic options" for its business. It said the German carrier's business has "deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges and from implementing alternative strategic solutions."

The Emirati national airline said it continues to have codeshares and other business relationships with Air Berlin and will support its management.

Air Berlin's decision comes three and a half months after another Etihad-backed European carrier, Alitalia, entered its second round of bankruptcy protection in a decade.

Etihad said at the time that Alitalia needed a "fundamental and far-reaching restructuring" and it was not prepared to keep pumping money into the struggling Italian airline.

Kirsten Grieshaber in Berlin and Adam Schreck in Dubai contributed to this story.</s>BERLIN — Germany on Wednesday rejected a claim by budget airline Ryanair of a “conspiracy” behind efforts to keep bankrupt rival Air Berlin afloat until a new owner is found.

The Irish airline lodged a complaint with European Union competition authorities after Air Berlin filed for bankruptcy protection and then got a 150 million euro ($177 million) loan from the German government.

Ryanair said late Tuesday there’s “an obvious conspiracy” between the German government, Lufthansa and Air Berlin. The loan will help Air Berlin to keep flights running for the next three months, while it is negotiating a possible deal with Lufthansa and another unnamed carrier, reported by German media to be easyJet.

A spokeswoman for Germany’s Economy Ministry said it was “absurd” to claim that the rescue package had been staged. Beate Baron told reporters in Berlin that the government expects the loan to Germany’s second-largest airline to be repaid.

Air Berlin filed for bankruptcy protection Tuesday 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, made a loss of about 782 million euros last year.</s>BERLIN — Irish budget airline Ryanair has filed a complaint with European Union competition authorities after Air Berlin filed for bankruptcy protection and then got a 150 million euro ($177 million) government loan to stay afloat.

Ryanair said late Tuesday there’s “an obvious conspiracy” between the German government, Lufthansa and Air Berlin. The loan will help Air Berlin to keep flights running for the next three months, while it is negotiating a possible deal with No. 1 German airline Lufthansa and another unnamed carrier.

Air Berlin filed for bankruptcy protection Tuesday after its main shareholder, Abu Dhabi-based Etihad, said it would make no more financing available following years of unsuccessful turnaround attempts.</s>BERLIN — Germany's second largest carrier, Air Berlin, is filing for bankruptcy after its main shareholder, Abu Dhabi-based Etihad, said it would make no more financing available.

The loss-making airline said Tuesday that after Etihad pulled funding, it "came to the conclusion that there was no further positive way ahead for Air Berlin."

To allay ' fears that they could be stranded on summer holiday, the German government immediately said it would provide a loan of 150 million euros ($177 million) so the airline it can continue flights for the time being.

"We're in a time when many tens of thousands of and vacationers are in multiple international holiday spots," the Economy and Transport ministries said in a joint statement. "The return flights of these back to Germany with Air Berlin would not have been otherwise possible."

Air Berlin has been posting losses for years and has a debt of 1.2 billion euros. It has recently been restructuring its operations to try and stay in business and has been kept aloft in recent years by Etihad, which holds a 29.2 share.

Following the bankruptcy announcement, Lufthansa said it was "supporting the restructuring efforts of the airline jointly with the German government" and that its leased aircraft would continue operating as before.

Lufthansa, Germany's largest airline, said it was "already in negotiations with Air Berlin to take over parts of the Air Berlin group and is exploring the possibility of hiring additional staff."

The German transport and economy ministries said Air Berlin had been in negotiations with Lufthansa "and another airline" for a long time.

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

It said it pumped 250 million euros of additional funding into Air Berlin as recently as in April and helped it "explore strategic options" for its business. It said the German carrier's business has "deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges and from implementing alternative strategic solutions."

"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.

The Emirati national airline said it continues to have codeshares and other business relationships with Air Berlin and will support its management.

"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," it said.</s>BERLIN: Air Berlin , Germany's second-largest airline, filed for bankruptcy protection on Tuesday after key shareholder Etihad Airways withdrew funding following years of losses, leaving valuable runway slots up for grabs.

The move offers Lufthansa and rivals a chance to acquire slots at airports such as Berlin Tegel and Duesseldorf, with Germany's largest airline keen to defend its domestic position against expansion by low-cost rival Ryanair .

Lufthansa confirmed it was in talks to take over parts of the business, while a source said easyJet was the second airline referred to by the government as being in talks with Air Berlin. The British budget carrier declined to comment.

The insolvency comes as thousands of Germans enjoy their summer holidays and just ahead of a September general election.

Berlin has granted a bridging loan of 150 million euros (US$176 million) to allow Air Berlin to keep its planes in the air for three months and secure the jobs of its 7,200 workers in Germany while negotiations continue.

The government said it expected decisions to result from these negotiations in the coming weeks.

Lufthansa has already leased Air Berlin planes to provide flights by its Eurowings budget airline and has made no secret of its interest in taking on more of Air Berlin's business while being mindful of the potential obstacles posed by debts and anti-trust issues.

"Lufthansa has played a canny waiting game over a number of years and is now well placed to cherry pick those parts of Air Berlin's operation that suit it best without buying the whole loss-making enterprise," Jonathan Wober, analyst at CAPA-Centre for Aviation, said.

Ryanair said Air Berlin was being prepared for Lufthansa's takeover, which it said would breach competition laws. But German transport minister Alexander Dobrindt said he was confident there would be no anti-trust issues because the business would be sold off in bits.

In a statement published after trading hours, the Irish carrier said it had lodged a complaint with the German and European competition authorities regarding "the obvious conspiracy" playing out in Germany over Air Berlin.

"This manufactured insolvency is clearly being set up to allow Lufthansa to take over a debt-free Air Berlin which will be in breach of all known German and EU competition rules," Ryanair said.

Air Berlin, which became famous for its "Mallorca shuttle" services, piled up debt after a series of takeovers and bookings have been hit in recent months by concerns over its finances.

It made a net loss in almost every year since 2008 and in 2016 reported a record deficit of 782 million euros (US$915 million), equivalent to more than 2 million euros a day.

Funding from Etihad Airways, which bought into the airline in 2011, has helped to keep it afloat and the Abu Dhabi-based airline provided an additional 250 million euros in April.

But Etihad has been reviewing its European investments after they failed to bring in the profits expected. Alitalia , another of Etihad's investments, is also in administration and is seeking bidders.

Meanwhile talks between Etihad and TUI , Europe's largest tour operator, about forming a joint venture holiday airline by merging TUIfly with Air Berlin's leisure airline Niki collapsed earlier this year.

Shares in Air Berlin last traded down 34 percent at 0.51 euros on Tuesday, valuing the airline at about 60 million euros. Ten years ago the carrier was worth around 1 billion euros.

Lufthansa shares were up 4.7 percent at 20.59 euros.

Pilots' union Vereinigung Cockpit (VC) blamed the shortcomings of past management at Air Berlin for its woes and expressed anger with Etihad. "It is a scandal that Etihad is dodging its responsibility and is leaving Air Berlin's staff out in the cold," VC President Ilja Schulz said in a statement.</s>Air Berlin, Germany’s second largest airline, filed for bankruptcy protection on Tuesday following years of losses and after key shareholder Etihad Airways withdrew funding, with bigger rival Lufthansa saying it is in talks to take over parts of the business.

The insolvency comes as thousands of Germans are enjoying their summer holidays and just ahead of a September general election.

But Berlin said it has granted a bridging loan of €150-million ($176-million) which will allow Air Berlin to keep its planes in the air for three months and secures jobs for its 7,200 workers in Germany while negotiations continue.

Air Berlin is in talks with Lufthansa and another airline about selling its assets, the government said, adding that it expected a decision in the coming weeks.

Lufthansa has already leased crewed planes from Air Berlin to provide flights by its Eurowings budget airline and has made no secret of its interest in taking on more of Air Berlin’s business, although it has said debts and anti-trust issues were potential obstacles.

“Lufthansa has played a canny waiting game over a number of years and is now well-placed to cherry pick those parts of Air Berlin’s operation that suit it best without buying the whole loss-making enterprise,” Jonathan Wober, analyst at CAPA-Centre for Aviation, said.

Air Berlin, which became famous for its “Mallorca shuttle” services, piled up debt after a series of takeovers and concerns over its finances have hit bookings in recent months.

It has made a net loss in almost every year since 2008 and in 2016 reported a record loss of €782-million ($915-million), equivalent to a loss of more than €2-million a day.

Funding from Etihad Airways, which bought into the airline in 2011, has helped to keep it afloat in recent years, but the Abu Dhabi-based airline has been reviewing its European investments after they failed to bring in the profit it expected.

Italian national airline Alitalia, another of Etihad’s investments, is also in administration and seeking bidders for its business.

Meanwhile talks between Etihad and TUI, Europe’s largest tour operator, about forming a joint venture holiday airline by merging TUIfly with Air Berlin’s leisure airline Niki collapsed earlier this year.

Etihad last provided additional funding of €250-million to Air Berlin in April.

“However, Air Berlin’s business has deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges and from implementing alternative strategic solutions,” Etihad said in a statement on Tuesday.

Shares in Air Berlin were down 39 per cent at 0.47 euros by 1248 GMT, valuing the airline at around €45-million. Ten years ago the carrier was worth around €1-billion.

Lufthansa’s shares were up 2.5 per cent at 20.15 euros.

Pilots’ union Vereinigung Cockpit (VC) blamed the shortcomings of past management at Air Berlin for the airline’s financial woes and expressed anger with Etihad.

“It is a scandal that Etihad is dodging its responsibility and is leaving Air Berlin’s staff out in the cold,” VC President Ilja Schulz said in a statement.</s>BERLIN — Struggling German carrier Air BerLin says it’s filing for bankruptcy after its main shareholder, Abu Dhabi-based Etihad, said it would make no more financing available.

The Economy Ministry and Transport Ministry said Tuesday in a statement that the airline would get a loan of 150 million euros ($177 million) so that it can continue flights for the time being.

The ministries say “we’re in a time when many tens of thousands of travellers and vacationers are in multiple international holiday spots. The return flights of these travellers back to Germany with Air Berlin would not have been otherwise possible.”

The airline, which didn’t answer calls, said in a statement that after Etihad pulled funding, it “came to the conclusion that there was no further positive way ahead for Air Berlin.”
Air Berlin, Germany's second largest airline, files for bankruptcy protection after its main shareholder, Abu Dhabi-based Etihad Airways, chose not to make more financing available.