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Air Berlin files for insolvency after losses mount

Air Berlin files for insolvency after losses mount

Beleaguered German carrier Air Berlin filed for insolvency on Tuesday (15 August), after its main shareholder - Abu Dhabi's Etihad Airways - withdrew its financial support.

Air Berlin said that it had applied for insolvency after it was told by Etihad that it was ending financial support after concluding that the Gulf carrier saw "no positive prospects for its continued existence".

The carrier, which reported a €782 million (Dh3.31 billion) loss in 2016, said the losses widened further to €293.3 million in the first quarter of 2017, compared with €182.3m during the same period past year. Etihad, which owns nearly 30% of Air Berlin, said the developments were "extremely disappointing" but it could not keep injecting cash, after investing an additional €250m in April.

Air Berlin has booked losses amounting to 1.2 billion euros ($1.3 billion) over the last two years, and has been relying on cash infusions from Etihad for survival.

Germany's giant services-sector union Verdi responded with dismay to Air Berlin's decision to file for administration.

GERMANY'S second biggest airline has said that flights will continue for the next three months' at least.

However, Etihad insists it remains "open to helping find a commercially viable solution for all parties" and that it "will support Air Berlin's management during these hard times".

Stockbroker sees hike for equity market in Rouhani's 2nd term
In Iran's presidential election on May 19, Rouhani garnered 23.5 million votes out of a total of 41 million. Iran has yet to issue a formal response to the sanctions imposed by the U.S.


A spokesperson for the European Commission said it was in " constructive contact" with Germany about the Air Berlin issue.

Etihad confirmed that it expects the German airline to continue operations during administration.

A TUI spokesman said it was in talks with Air Berlin over its wet lease contract with Air Berlin, which sees TUIFly planes leased to Niki.

Etihad said the airline's business had "deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges".

Ryanair said Air Berlin was being prepared for a Lufthansa takeover, which it said would breach competition laws. Talks with Deutsche Lufthansa and other parties regarding disposals of assets are continuing, the airline said.

The pilots' union Cockpit said the Air Berlin news came as "a shock".


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