Major German air carrier files for insolvency

Air Berlin files for insolvency after Etihad withdraws support

Air Berlin said its flights were continuing.

The carrier says it has been notified by shareholder Etihad Airways "that it no longer intends to provide Air Berlin with financial support".

The company said that two members of the board of directors, who had been nominated to the board by Etihad, had resigned.

In a statement, Germany's Transport Ministry said it would guarantee a €150 million loan from state development bank KfW to make sure Air Berlin could continue to run its scheduled services over the next three months.

The ministries also said they expected a decision from Lufthansa LHAG.DE and another airline concerning the sale of parts of the business in coming weeks.

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 is a minority shareholder in airberlin.

"We have been informed that airberlin has filed for administration".

The beleaguered company said that the support of German government means that all flights will continue as planned and that the flight schedule and bookings remain valid.

Etihad said that it withdrew funding after Air Berlin's operations deteriorated at an "unprecedented pace" in recent months.

Air Berlin said the talks with Lufthansa "and other partners" about acquiring its assets were already far advanced.

Following the bankruptcy announcement, Lufthansa said it was "supporting the restructuring efforts of the airline jointly with the German government" and that its leased aircraft would continue operating as before.

A spokesperson for the European Commission said it was in " constructive contact" with Germany about the Air Berlin issue. In May, Alitalia, which was 49% owned by Etihad, also went into bankruptcy.

The German government, like Italy's before it with Alitalia, is now helping to find a solution to protect jobs.

In a bid to turn the tide, the Berlin carrier embarked on an extensive restructuring plan past year that included leasing 38 aircraft with crew to Lufthansa and slashing 1,200 jobs - or one in seven of its workforce.

Air Berlin is flying from Berlin and Dusseldorf.

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