airberlin files for insolvency as Lufthansa talks continue

airberlin has filed for insolvency following the withdrawal of further funding by partner airline Etihad, the carrier announced today, with rival carrier Lufthansa poised to take over parts of the business.

According to a brief statement by airberlin, the self-administered insolvency proceedings will allow the airline to continue with its ongoing restructuring process.

A transitional loan from the German government will allow operations to continue as normal, with the funding estimated to carry airberlin through the next three months.

While Etihad provided 250 million euro in support to airberlin this past April, the Gulf carrier said that it could not continue with additional funding.

“airberlin’s business has deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges and from implementing alternative strategic solutions,” read statement from Etihad. “Under these circumstances, as a minority shareholder, Etihad cannot offer funding that would further increase our financial exposure. We remain open to helping find a commercially viable solution for all parties. We have a commercial relationship with airberlin across a range of areas, including codeshare operations, and we will support airberlin’s management during these difficult times…. Germany is an important market for Etihad and Abu Dhabi, and we remain committed to providing comprehensive air links as a key enabler of trade and tourism.”

Lufthansa said it is also supporting the restructuring efforts of the airline jointly with the German government, ensuring “that all aircraft that are currently operated by airberlin under a wet lease agreement for Eurowings and Austrian Airlines will continue operating as before.”

A statement from Lufthansa reads in part that the airline “is already in negotiations with airberlin to take-over parts of the airberlin Group and is exploring the possibility of hiring additional staff. Lufthansa intends to conclude these negotiations successfully in due time.”

News of airberlin’s insolvency comes following the recent announcement of a new Toronto-Dusseldorf flight, which was scheduled to commence next May.