Air Berlin filed for bankruptcy yesterday afternoon following 49% owner Etihad refusing to provide further finance for the airline. The German Government has loaned €155m to enable three months of operations but the airlines break up, is in my opinion, almost inevitable.
Subsidiary FlyNiki was already in the process of being sold. Many aircraft have been wet or dry leased to other airlines including Lufthansa. Lufthansa Group is probably the only viable buyer of the failing airlines remaining assets, its debts are considerable and the airline has gone through three failed restructures in barely as many years.
Etihad withdrawing financing shows the danger of allowing, what appeared to be an angel investor, willing to turn around struggling operations, from just walking away and writing off its losses when the going gets tough. Darwin in Switzerland has had to find a new partner, Alitalia will virtually cease to exist in its current form (though that result is decades over due), and Air Berlin’s roller coaster management changes haven’t been managed well by Etihad’s own change at the top.
The episode endangers thousands of jobs in Germany and is the final nail in the coffin of Etihad’s ‘Equity Partnership’ policy that seems to have been far from equitable and not really a partnership.
There is one potential investor who has taken an airline back from the brink and made it work: IAG did it with Iberia, in a worse state than Air Berlin. IAG also promoted and sponsored Air Berlin’s membership of OneWorld. They know how to, but do they want to?