EU approves insolvent Air Berlin’s 150m euro lifeline

Published: September 06, 2017 00:29:51 | Updated: October 21, 2017 22:05:10

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FRANKFURT, Sept 5 (Reuters): The European Commission (EC) on Monday approved a German bridging loan for Air Berlin that will keep the insolvent airline's planes flying while it tries to find buyers for its assets.
Air Berlin, Germany's second-largest airline, filed for bankruptcy protection in August after shareholder Etihad Airways withdrew funding following years of losses.
The government pledged a 150 million euro ($179 million) loan to prevent Air Berlin's planes from immediately being grounded, which would have stranded holidaymakers abroad and put around 8,000 jobs at risk only weeks before a national election.
"The measure will allow for the orderly wind-down of the insolvent airline Air Berlin without unduly distorting competition," the Commission said in a statement.
The money will last at most until mid-November, which means the pressure is on to agree a carve-up of Air Berlin, whose assets include about 140 leased aircraft and valuable take-off and landing slots in Germany.
German flagship carrier Lufthansa has government backing to take over large parts of the airline. Britain's easyJet and Thomas Cook's Condor are also seen as likely bidders.
HSBC analysts said they expected Ryanair, which has said it is not bidding for Air Berlin assets, to also expand its capacity in Germany after Air Berlin is split up.
British Airways owner IAG may snap up any A320 or A330 aircraft left over at low lease prices following the carve-up, they added.
A few other investors have expressed interest in parts or all of Air Berlin, though they are seen less likely to prevail.
Businessman Alexander Skora on Monday proposed returning Air Berlin to its roots as a holiday carrier serving destinations such as Majorca.
Skora, who has so far invested mainly in real estate and startups, told Reuters he was looking at the carrier's books and would then decide whether to submit a formal bid jointly with a consortium of unidentified investors from Israel, Canada and the United States.
German aviation investor Hans Rudolf Woehrl had expressed interest in Air Berlin as a whole but has stepped back from the process to search for a partner.

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