Air Berlin has made a last desperate cash grab from it’s former largest stockholders, Etihad, after blaming them for being the catalyst of the airline’s bankruptcy filing
Failed airline Air Berlin has announced it is making a desperate cash grab from Etihad, who abandoned the company’s sinking ship in August of this year. After years of Air Berlin being crippled by debt, Etihad finally gave up throwing cash in an attempt to keep Air Berlin functional.
Consequently, Air Berlin believes that Etihad left them with no other choice than to file for insolvency. And now, Air Berlin is claiming that Etihad should recompense them for allegedly forcing them to go bankrupt.
According to Reuters, Air Berlin’s representative, Frank Kebekus states that the company is seeking €10 million in damages from Etihad. Kebekus claimed he felt confident that the failed airline would achieve a settlement with their former primary stockholders. Up until August, Etihad owned 29.21% of Air Berlin’s shares. Etihad had initially hoped to benefit from the 2011 deal by gaining greater access to Air Berlin’s European network.
Thus far, Etihad has not issued a formal statement
Etihad has been busy cutting most of its losses by withdrawing its shares from many airlines in the European market. In 2014, Etihad withdrew it’s 49% stake in Alitalia. Air Berlin appears to have been “next in the queue” as Etihad sets about removing themselves from these many risky investments.
Air Berlin additionally invoked public debate when the German government allotted them a €150 million loan. The German government claims this is to keep the airline in the air for a further three months. Many claimed that this was an illegal move. They believe that giant Lufthansa will now conveniently be able to monopolize the German industry when it usurps Air Berlin’s assets.
Lufthansa possibly breaching all competition rules
In a report in Fortune on August 15 this year, Robin Kiely of Ryanair accused Lufthansa of dirty dealing. He claimed “This is clearly being set up for Lufthansa to take over Air Berlin, in breach of all known German and EU competition rules. The German government is supporting this Lufthansa-led deal with €150 million of state aid so that Lufthansa can acquire Air Berlin and drive domestic airfares in Germany even higher than they already are.”
Air Berlin, on the other hand, defended the loan. The airline claimed that the security of 8200 of its former employees was the priority. However, Kebekus also stated that setting up a transfer company could potentially employ around half of them temporarily. The most significant losers will likely be the bondholders. Unfortunately, €600 million outstanding Air Berlin bonds will probably never have their claims considered.
In fitting style, Air Berlin left the skies with controversy earlier this month
Pilots making the airline’s final flight into Dusseldorf airport found themselves with their licenses suspended. The errant albeit defiant pilots had allegedly performed an illegal low flying fly-past over the city, claiming they were giving the historic airline a “dignified goodbye.”
Air Berlin flew its first flight from Berlin during the Cold War in 1978. All in all, it is a sad and embarrassing end of an era for a once much-loved airline.
Update on 28.10.2017
— Lukas Wrede (@lukaswrede) October 27, 2017
— Victoria Bryan (@vl_bryan) October 27, 2017
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