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  • Air Berlin’s bankruptcy

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    After long and negotiations, Air Berlin finally filed for bankruptcy yesterday, Tuesday 15 August. In the middle of summer, the airline that had made a fortune by making flights to Majorca, a very popular destination in Germany, is obliged to cease its activities.


    A complicated financial situation

    The German company has been in debt for almost a billion euros and has been in a deficit for years. Since 2012, Air Berlin has seen its financial situation decline rapidly: that year, despite a turnover of 4.3 billion euros, profits are only 7 million. From 2013, the company is in the red and will not make any more profit.
    Last year, one of the worst for the German company, the operating loss is 667 million euros.

    The company’s efforts to recover from the change of service provider for ground services has been completely overtaken by the workload and has caused the accumulation of delays and cancellations of flights since March. The situation had become untenable for employees and passengers.

    Things got even worse when Etihad, the main shareholder of Air Berlin, decided not to give the company a second payment on the grounds that it had failed in the objectives it had set itself. Moreover, with Alitalia, it is the two European investments of the Arab company that turn out to fail shortly after its entry into their capital.


    No flight cancellations planned

    In order not to spoil  Germans holidays, the government (which is campaigning for its reelection in 6 weeks) has granted an emergency loan to maintain its activities for the next 3 months and potentially find a buyer. The German Ministry of Economics has announced an emergency loan of 150 million euros.

    Indeed, Ryanair is interested but would probably have bought the air routes leaving the 8,500 employees of the company unemployed. As Nicoley Baublies, a trade unionist at IGL, explains, “Jobs at Ryanair are not a solution for the country and for people”. Discussions are open with Lufthansa so that the first German company will take over some of the activities of the second. Few details have leaked at the moment, it will take another few months to learn more.

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