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Air Berlin files for insolvency but keeps flying

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Frankfurt am Main: Germany’s Air Berlin announced that it had filed for insolvency after its main shareholder Etihad Airways said it would not plough any more cash into the troubled carrier.


The German government said it was providing a bridging loan of 150 million euros ($175 million) to keep the airline flying at a time when many Germans are still on holiday.


German rival Lufthansa said in a separate announcement it was in talks with Air Berlin to take over parts of the group.


Air Berlin has long battled for survival, booking losses amounting to 1.2 billion euros over the past two years and relying on cash infusions from Etihad.


In a surprise announcement, the airline said it had filed for insolvency with the court of Berlin-Charlottenburg after Etihad “notified Air Berlin PLC of the fact that it will not provide any further financial support to the Air Berlin group”.


Etihad, which holds a 29.2 per cent stake in Air Berlin, said that the development was “extremely disappointing” but it could no longer justify further funding after providing an additional 250 million euros in April.


“Air Berlin’s business has continued to deteriorate at an unprecedented rate, preventing it from overcoming its significant challenges,” the Abu Dhabi-based company said.


German Economy Minister Brigitte Zypries told a hastily assembled press conference that the government was assisting Air Berlin with a loan to prevent passengers from being stranded during the busy holiday season.


“To keep Air Berlin’s flight operations going, the government has decided to grant a bridging loan for 150 million euros,” she told reporters. — AFP


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