Aug. 15 (UPI) — Air Berlin Plc, Germany’s second-largest airline, announced it filed for insolvency after major shareholder Etihad Airways withdrew additional financial support.
The low-cost airline reported losses of $3.2 billion over the past six years. Etihad, the United Arab Emirates’ carrier, bought a 29 percent stake in Air Berlin in 2012 as a means of funneling European passengers through its Abu Dhabi hub. The strategy has not worked, as Etihad reported a $1.87 billion loss in 2016.
Etihad also stopped funding another airline in which it invested, Italy’s Alitalia, in May.
Air Berlin lost one-quarter of its customers in the past year, and has been forced to pay millions of euros in compensation for delays and cancelled flights.
It will receive a loan from the German government totaling $176 million. German Economic Minister Brigitte Zypries said Monday that loan should keep Air Berlin flying for at least three months.
She added Air Berlin is in negotiations with Lufthansa AG, Germany’s national air carrier — a deal that could see Lufthansa take over some of Air Berlin’s assets and air routes.
The announcement of insolvency puts thousands of German jobs at risk, and comes weeks before German Chancellor Angela Merkel runs for re-election.