Airberlin has filed with a Berlin district court to begin
insolvency proceedings, although it will maintain flight operations via a loan
from the German government.
Airberlin has posted significant
losses over the past several years, and Etihad Airways, which has a
minority stake the carrier, is pulling financial support. It will continue
commercial relationships like codeshares.
Despite "extensive support" for Airberlin's restructuring
efforts, including €250 million in funding last April, the investment is no
longer viable for Etihad, which itself recorded a significant
loss in 2016. "Airberlin's business has deteriorated at an
unprecedented pace, preventing it from overcoming its significant challenges
and from implementing alternative strategic solutions," according to Etihad.
"Under these circumstances, as a minority shareholder, Etihad cannot offer
funding that would further increase our financial exposure."
Etihad estimated that its investments in Airberlin and
Alitalia, which also began
bankruptcy proceedings this year, cost it $808 million in 2016.
Airberlin said all flight plans and booked tickets remain
valid and the carrier is still taking reservations. Germany will loan Airberlin
€150 million, and Lufthansa is supporting the restructuring efforts, in part to
maintain a
wet lease agreement in which Airberlin provides aircraft for Lufthansa carriers
Eurowings and Austrian Airlines. Lufthansa also is negotiating to take over
parts of the Airberlin Group.
Those
moves prompted Ryanair to file competition complaints with German competition
regulator Bundeskartellamt and the European Commission. Ryanair said a
Lufthansa takeover of Airberlin would breach competition rules and "drive
domestic airfares in Germany even higher than they already are."