Air Berlin files for Bankruptcy

Air Berlin files for insolvency after losses mount

Germany's second-biggest airline on Tuesday filed for insolvency after its majority shareholder made a decision to withdraw its financial support.

The struggling German airline filed for insolvency earlier today after years of losses caught up with it and Etihad withdrew funding, a report said.

"We are working tirelessly to achieve the best possible outcome for the company, our customers and employees, given the situation", Air Berlin CEO Thomas Winkelmann said in a statement. In both cases, shareholder Etihad Airways decided it could no longer keep pumping funds into these strategic partners.

Berlin will support the plan with a bridge loan of 150 million euros, ensuring that Air Berlin flights will continue according to schedule.

Ryanair is not happy about Lufthansa's interest in Air Berlin and the German government's temporary loan.

"Lufthansa is supporting the restructuring efforts of the airline jointly with the German Government", LHG said in a statement on its website.

On Tuesday, discount carrier Air Berlin filed for insolvency in a local Berlin court. At the time, those included Etihad and its airport services subsidiary, Air Berlin, Alitalia, Air Serbia and Air Seychelles Ltd.

Eurowings said it regretted that UFO had ended mediation talks even though it had "offered viable solutions and wanted to work out a compromise with the mediator". 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". Through July, airberlin passengers were down 16 percent year over year.

Lufthansa for its part announced that it was "already in negotiations with Air Berlin to take over parts of the airberlin group and is exploring the possibility of hiring additional staff". The British budget carrier declined to comment.

The government funding also makes sure that Air Berlin aircraft now under lease from rivals Eurowings and Austrian Airlines can stay in operation. Damian Brewer of RBS said: "For Lufthansa we see any moves as defensive - blocking other more competitive airlines from expanding".

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