European carrier Air Berlin has filed for administration following Etihad’s, the airline’s biggest shareholder, refusal to support the company with another cash injection. Etihad has been propping up the ailing airline for the last six years and injected £227mn in April.
Air Berlin’s business has been dented by the competition from low-cost carriers such as Ryanair and easyJet and passenger numbers have fallen 24% year-on-year. The airline has also been damaged by large compensation bills for customers following numerous cancellations and delays recently.
Etihad said the airline’s business had “deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges”.
“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.”
A €150m loan from the German government ensures that Air Berlin will continue to operate in the meantime as talks with Lufthansa continue to buy part of the group.