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Air Berlin files for Bankruptcy

16 August 2017

Air Berlin, Germany's second-largest carrier, has filed for bankruptcy today.

On Twitter Air Berlin CEO, Thomas Winkelmann said: "All flights operated by airberlin & NIKI will continue as planned and our flight schedule remains valid!". According to the announcement, it seems the German government will find a solution to keep Air Berlin operating.

"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 European Union competition rules". "These negotiations may be finalised shortly", the statement added.

Air Berlin will continue to operate as a member of the oneworld alliance group as they have filed for the proceedings required to self-administrate as it continues its restructuring process.

The carrier was sustained by its main shareholder Etihad which owns 29.2 percent of the company's stock since 2011.

The Gulf-based company said the development was "extremely disappointing" especially as it had provided extensive support to Air Berlin over the last six years, notably with a €250m (£227m) cash injection in April this year.

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Machnig also said the German government's decision to grant a bridge loan was the right move since there wouldn't have been enough capacity to fly home thousands of vacationing Air Berlin customers on short notice.

Air Berlin said two members of its board of directors who had been nominated by Etihad had resigned.

It also emerged that Air Berlin is in advanced talks with rival Lufthansa for the sale of some aspects of its business as it already leases aircraft to the German flag carrier.

Air Berlin is flying from Berlin and Dusseldorf. Etihad had bought into a number of European airlines in recent years, not least because it hoped they would drive long-haul traffic to its hub in Abu Dhabi and also support its efforts to break into the USA market.

Etihad said it withdrew its funding after operations at Air Berlin deteriorated at a pace that was unprecedented the past few months.

Etihad concluded that it remains committed to providing "comprehensive air links" to Germany, and that would continue to support Air Berlin's management as a codeshare partner.

Air Berlin files for Bankruptcy