Economy

Etihad Airways says can not bail out Air Berlin

Etihad Airways says can not bail out Air Berlin”

In its own statement, Lufthansa verified that it is in negotiations to take over portions of Air Berlin Group.

Germany's giant services sector union Verdi responded with dismay to Air Berlin's surprise announcement.

The move by the struggling airline forced the German government to step in to provide it with a temporary credit of 150 million euros (176 million dollars) to help it continue operating.

"We assume that Air Berlin's airport slots. can be marketed and sold and we assume that the loan can be paid back", she told journalists during a news conference.

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. Etihad provided it with €250 million in April but chose to pull further funding following a review of its European investments.

"Under these circumstances, as a minority shareholder, Etihad can not offer funding that would further increase our financial exposure".

"The board of directors of Air Berlin PLC has, after close evaluation, determined that Air Berlin PLC has no longer a positive continuation prognosis", the airline said, adding that it had filed for insolvency with the court of Berlin- Charlottenburg.

News agency Bloomberg estimates that Air Berlin has burnt through nearly €2 billion in six year.

"However, Air Berlin's business has deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges and from implementing alternative strategic solutions", Etihad said in a statement on Tuesday.

"We will support Air Berlin's management during these hard times", the statement added.

"The goal has been to keep out Ryanair", the person said in reference to negotiations.

Air Berlin's decision comes three and a half months after another Etihad-backed European carrier, Alitalia, entered its second round of bankruptcy protection in a decade.



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