Air Berlin files for insolvency

After posting a series of annual losses, including €780 million in 2016, Air Berlin, Germany’s second-largest carrier by passenger numbers, has filed for bankruptcy protection after Gulf carrier Etihad Airways, a 30% stakeholder in the company, withdrew any further financial support. Air Berlin has been granted a €150 million bridging loan to enable it to continue operating for three months while negotiations can take place over the future of its 7,200 employees.
The demise of Air Berlin will see the release of valuable slots at airports such as Berlin Tegel and Duesseldorf. The carrier has struggled to compete against low-cost carriers such as Ryanair and easyJet, the latter having already shown an interest in acquiring the ailing company. Efforts to save the airline have included employing five different chief executive officers over the last six years. However, the recent failed attempt to create a leisure carrier with TUI by Thomas Winkelmann, the current CEO who was a former manager with Lufthansa, left few options available, especially considering that Air Berlin has current debts of approximately €1 billion.
According to Jonathan Wober, an analyst at CAPA-Centre for Aviation, “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.”
Ryanair has said it feels that Air Berlin was being prepared for a Lufthansa’s takeover, which it feels would breach competition laws. However, German transport minister Alexander Dobrindt said he was sure there would be no anti-trust issues as the business would be disposed of in bits. (€1.00 = US$1.17 at time of publication.)