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Air Berlin files for insolvency, rivals circle

Tuesday, August 15, 2017 - 01:37

Air Berlin, Germany's second largest airline, has filed for bankruptcy protection following years of losses, after key shareholder Etihad Airways withdrew funding. As Sonia Legg reports, bigger rival Lufthansa says it's in talks to take over parts of the business.

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Air Berlin's decision to file for bankruptcy protection came as no surprise. Germany's second largest airline has been losing money for years and key shareholder Etihad Airways recently withdrew funding. (SOUNDBITE) (German) AIR BERLIN PASSENGER, PETRA JAEGER, SAYING: "I personally never had a bad experience with AirBerlin and I have often flown with them. I don't understand why they are insolvent." But the timing did mean some government assurances were required. It's the middle of the holiday season and just weeks ahead of an election. (SOUNDBITE) (German) GERMANY ECONOMY MINISTER, BRIGITTE ZYPRIES, SAYING: "The German government has decided unanimously to provide AirBerlin with a bridging loan of 150 million euros. It will be managed by the KfW bank and is supported by federal guarantees." It means Air Berlin can keep flying for three months. And it secures 7,200 jobs while negotiations continue. (SOUNDBITE) (German) GERMANY ECONOMY MINISTER, BRIGITTE ZYPRIES, SAYING: "AirBerlin said today that the booked tickets are still valid, their routes are still valid, and flights can still be booked." Lufthansa says it's in talks to buy parts of the business. It already leases planes from Air Berlin for its Eurowings budget operation. But its debts and anti-trust issues could be potential obstacles. Others are reportedly circling - including Britain's easyJet. One German pilots union blamed the airlines woes on past management and expressed anger with Etihad Shares fell 40 percent, valuing the airline at around 45 million euros. Ten years ago it was worth around 1 billion euros.

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Air Berlin files for insolvency, rivals circle

Tuesday, August 15, 2017 - 01:37