Beleaguered Air Berlin files for insolvency as investor backs out

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.

The budget airline, part of the One World Alliance fronted by British Airways and American Airlines, submitted the filing at a court in Berlin.

Bankruptcy protection for Air Berlin's Niki Luftfahrt and Leisure Cargo units will not be sought, according to court documents.

Talks to merge Niki with TUI's German airline business broke down in June after Etihad, which owns nearly 30% of Air Berlin, said it had failed to reach a deal on forming a joint venture for the operation.

A spokesperson for Air Berlin told IB Times UK its flights were continuing to "operate as normal" as the German government has stepped in to provide a temporary bridging loan.

The airline is in advanced talks with rival Lufthansa for the sale of some aspects of its business as it already leases aircraft to the German flag carrier.

Air Berlin undertook a restructuring exercise in 2016 to stem its losses. That year, the airline also confirmed it no longer owns any of its aircraft, having sold and leased back its fleet and announced that it would be reducing the number of destinations it flies to from 140 to 70.

Ahead of the insolvency filing, in April 2017, Air Berlin posted a loss of €781.9m (£711.89m) for 2016, from a revenue of €3.79bn.