After making several attempts to turn the airline around, German budget airline airberlin announced on Tuesday that it would be filing for bankruptcy after its largest shareholder and key financier, Etihad Airways, said it would no longer help finance the company.
Etihad, based in Abu Dhabi, has served as the lifeline for airberlin since becoming the company’s largest shareholder in 2011, providing a stream of money despite the German airline’s inability to turn a profit. After six years, Etihad realized their efforts weren’t going to help the company, and decided to pull the plug on future financing.
“cannot offer funding that would further increase our financial exposure”
“This development is extremely disappointing for all parties, especially as Etihad has provided extensive support to airberlin for its previous liquidity challenges and restructuring efforts over the past six years,” a spokesperson for Etihad said on Tuesday. “As a minority shareholder, Etihad cannot offer funding that would further increase our financial exposure.”
Travelers holding onto airberlin tickets should not worry though, as the German government is providing the airline with a 150 million euro ($177 million) loan to keep the airline afloat while it heads into the bankruptcy process.
“We’re in a time when many tens of thousands of travelers and vacationers are in multiple international holiday spots,” the German Economy and Transport Ministries said in a statement on Tuesday. “The return flights of these travelers back to Germany with Air Berlin would not have been otherwise possible.”
Lufthansa, which currently leases unused planes from airberlin, announced that they too will be playing a role in providing help to the airline where it can by working in tandem with the German government while also exploring options for taking over parts of the company.