Brussels approves Air Berlin rescue
8 September, 2017
The Commission endorsed last Monday Germany's plans to grant Air Berlin a temporary €150m bridging loan to allow for the orderly wind-down of the insolvent airline, news wires reported. Germany notified the Commission mid-August of its intention to grant such a loan to Air Berlin. This followed Etihad, Air Berlin's main shareholder, withdrawing its financial backing for the loss-making company.
The German public credit institution KfW will provide a credit facility to Air Berlin over the next months. The purpose of the loan is to allow Air Berlin to continue operations in the coming months, with the aim of maintaining its services while it concludes ongoing negotiations to sell its assets. At the end of the process, Air Berlin is expected to cease operating and exit the market.
The Commission says it has taken account of the fact that the loan will be paid out in instalments under stringent conditions. In particular, Air Berlin has to demonstrate its liquidity needs on a weekly basis and new instalments will only be paid when all existing liquidity has been used. Germany committed to ensure that either the loan will be fully repaid, or it will submit a winding down plan for Air Berlin.