MIAMI — Germany’s second largest airline and Oneworld member, Airberlin, announced and initiated today insolvency proceedings under self-administration to follow up the restructuring process—which is currently underway—at Amtsgericht, the local District Court of Berlin-Charlottenburg.
airberlin files for insolvency | German Government offers support | airberlin continues flight operations
— airberlin (@airberlin) August 15, 2017
The Federal German Government, Lufthansa, and different associates are helping and encouraging Airberlin in its restructuring. The Federal Government is backing the German airline with a bridge loan of 150 million Euros to maintain flight operations for the long-term.
In other words, all flights operated by Airberlin and NIKI will continue as planned; the flight schedule remains valid; bookings remain valid; all flights can still be booked.
Airberlin’s CEO, Thomas Winkelmann, stated, “We are working tirelessly to achieve the best possible outcome for the company, our customers, and employees, given the situation.”
CEO Thomas Winkelmann confirms:
All flights operated by airberlin & NIKI will continue as planned and our flight schedule remains valid! pic.twitter.com/gbR1vSqMg4
— airberlin (@airberlin) August 15, 2017
Although Airberlin has the support of many carriers and companies while they struggle their bankruptcy, the most important partner of the carrier, Etihad Airways, announced today that they’re no longer providing financial support to the German airline.
In 2011, Etihad bought a minority stake in airberlin and has been accountable for keeping it above the clouds for several years. In April, they provided an additional round of funding consisting of 250 million euros. However, their financial investments failed to bring the value expected.
“We have been informed that airberlin has filed for administration,
This development is extremely disappointing for all parties, especially as Etihad has provided extensive support to Airberlin for its previous liquidity challenges and restructuring efforts over the past six years.
In April this year, Etihad provided 250 million Euros of additional funding to Airberlin as well as supporting the airline to explore strategic options for the business. However, Airberlin’s business has deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges and from implementing alternative strategic solutions.”
Under these circumstances, 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.
We expect Airberlin operations to continue during administration. We have a commercial relationship with Airberlin across a range of areas, including codeshare operations, and we will support Airberlin’s management during these difficult times.
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.”
For Etihad, Air Berlin is the latest of several failed investments. In Swtizerland, Etihad recently sold its stake in Darwin Airlines, a struggling regional airline marketed at “Etihad Regional.”
In Italy, Etihad holds a 49% stake in the struggling airline Alitalia. Recently, Etihad made a bid to buy Alitalia outright. With falling oil prices and increasing pressures from the UAE government, Etihad has made the wise decision to pull limit its financial exposure with several of these carriers.
Arrangements with Lufthansa and other partners about the addition of business units of Airberlin are somewhat promising. These negotiations may be concluded soon. In a statement, Lufthansa said “Lufthansa is already in negotiations with Airberlin to take-over parts of the Airberlin Group and is exploring the possibility of hiring additional staff. Lufthansa intends to conclude these negotiations successfully in due time.”
Benjamin Bearup contributed to this report.