Air Berlin Files Bankruptcy After Etihad Withdraws Support

Long struggling Air Berlin has effectively declared bankruptcy after one of its major stakeholders, Etihad Airways, said it would stop subsidizing the airline.

But although airlines in Europe don’t have the option of keeping creditors at bay, like their U.S. counterparts do under Chapter 11 reorganization,  in this case, the German government has thrown Air Berlin a lifeline, in the form of a 150 million bridge loan.  That will allow the airline, Germany’s second largest, to continue flying while it works out a possible sale of its assets.  Lufthansa has already confirmed it is in discussions to acquire some or all of its former rival.

The German carrier thus becomes the latest of Europe’s more traditional airlines to face extinction: Alitalia is also on life support. Etihad, which also had a stake in the Italian flag carrier, has signaled its displeasure with significant losses those two airlines have incurred.

Air Berlin flies to eight cities in the U.S.: New York, Boston, Orlando, Miami, Chicago, Los Angeles, San Francisco and Fort Myers, FL.