Air Berlin Files for Insolvency

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Air Berlin Files for Insolvency

Postby Greg on Tue Aug 15, 2017 7:20 am

Air Berlin filed for insolvency after leading shareholder Etihad Airways PJSC withdrew its financial support, marking the second failure of a major European airline in four months after the Persian Gulf carrier pulled the plug on funding Italy’s Alitalia SpA in May.

While Air Berlin said in a statement Tuesday that it will continue flying with the help of government loans, the filing puts thousands of German jobs at risk weeks before German Chancellor Angela Merkel stands for re-election. Deutsche Lufthansa AG said it may buy parts of its main national rival.

Air Berlin has racked more than 2.7 billion euros ($3.2 billion) of losses in a little over six years and has net debt of 1.2 billion euros. Etihad bought a 29 percent stake in 2012 as part of a plan to feed more passengers through its Abu Dhabi hub by building a network of minority investments, a strategy that it’s now unraveling after itself suffering losses of $1.87 billion in 2016.

Bloomberg
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