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Air Berlin has filed for administration after Etihad Airways said it cannot continue to guarantee future cash infusions into the troubled airline.
“This development is extremely disappointing for all parties, especially as Etihad has provided extensive support to Airberlin for its previous liquidity challenges and restructuring efforts over the past six years,” Etihad has said in a statement.
“In April this year, Etihad provided €250 million of additional funding to Airberlin as well as supporting the airline to explore strategic options for the business. However, Air Berlin’s business has deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges and from implementing alternative strategic solutions.
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.”
The development is in contrast with Airberlin CEO Thomas Winkelmann’s view in June that the airline’s position had improved and would soon show results.
“We had made a preliminary application for a surety as part of management’s pre-emptive strategy of investigating all restructuring options for airberlin. However, we have at no point made a binding application for a surety, and will not do so,’ said Winkelmann at the time, asserting that the company was making good progress with its restructuring.
The UAE’s national carrier has a 29.12 percent stake in Air Berlin which posted its biggest ever loss at AED 3.19 billion (€782 million) for the 2016-2017 financial year. It’s losses weighed in heavily on Etihad’s own results of US$ 1.87 billion (AED 6.87 billion) in losses which it announced last month.