Air Berlin Plc filed for insolvency after leading shareholder Etihad Airways PJSC withdrew its financial support, marking the second failure of a major European airline in four months after the Persian Gulf carrier pulled the plug on funding Italy’s Alitalia SpA in May.
The insolvency comes as thousands of Germans are enjoying their summer holidays and just ahead of a September general election.
But Berlin said it has granted a bridging loan of 150 million euros ($176 million) which will allow Air Berlin to keep its planes in the air for three months and secures jobs for its 7,200 workers in Germany while negotiations continue.
Air Berlin is in talks with Lufthansa and another airline about selling its assets, the government said, adding that it expected a decision in the coming weeks.
Lufthansa has already leased crewed planes from Air Berlin to provide flights by its Eurowings budget airline and has made no secret of its interest in taking on more of Air Berlin’s business, although it has said debts and anti-trust issues were potential obstacles.
“Lufthansa has played a canny waiting game over a number of years and is now well-placed to cherry pick those parts of Air Berlin’s operation that suit it best without buying the whole loss-making enterprise,” Jonathan Wober, an analyst at CAPA-Centre for Aviation, said.