Air Berlin files for bankruptcy – are you you one of the millions of passengers affected?
Passengers have only been reassured that flights continue for the next three months thanks to a €150 million from the German government
AIR Berlin has filed for bankruptcy after its main shareholder Etihad Airways said it would stop ploughing cash into the struggling company.
The German government has had to step in with a loan of €150 million (£136 million) so that flights can keep running for the next three months.
The airline’s biggest German rival Lufthansa is now in talks with Air Berlin to take over parts of the group.
While the German government has only committed a certain amount of money to keeping the airline afloat, it is not certain that Air Berlin will close its doors anytime soon.
The Italian airline Alitalia first went bankrupt in 2008 before being bought buy a consortium and in June this year it fell into administration for the second time in a decade.
In fact, flights are still on sale from London to Innsbruck on Air Berlin's website for next January.
Air Berlin has been struggling to stay afloat for years and in the last two years it recorded losses of 1.2 billion euros, having to rely on cash injections from Etihad for survival.
The German airline said in a statement that it had filed for insolvency with the court of Berlin-Charlottenburg after Etihad pulled funding.
Etihad, who holds a 29-percent stake in Air Berlin, said that it could no longer justify further funding after providing an additional 250 million euros for the airline last April.
It said: "Air Berlin's business has continued to deteriorate at an unprecedented rate, preventing it from overcoming its significant challenges.”
BEAT YOUR FEAR OF FLYING A pilot has revealed the best trick for keeping calm in plane turbulence... and all you need is a pen and paper
Last autumn, the struggling airline tried to overcome its financial problems with a massive restructuring plan.
It rented 38 aircraft with crew to Lufthansa and slashed 1,200 jobs - one in seven of its workforce.
But during the restructuring, it was hit by a series of flight cancellations and severe delays, leading to a flood of complaints.
Lufthansa said it was already in negotiations with Air Berlin to take over parts of the company and that it is exploring the possibility of hiring additional staff.
Your rights if you've got a flight booked with Air Berlin
GERMANY'S second biggest airline has said that flights will continue for the next three months' at least.
But if you've got a flight booked with the airline, we explain your rights, says Sun Online's Consumer Editor Tara Evans.
- ATOL protection provides a guaranteed refund if a company goes belly up - if you booked direct with Air Berlin you won't have ATOL protection, but if you booked the flights as part of a package from a travel agent you will.
- If your flight is cancelled then you may also be able to get the money back from your credit card company. Anything that is over £100 and under £30,000 is protected under the Consumer Credit Act. You'll need to apply to your lender for a refund.
- Flights costing less than £100 and booked on a debit card may be protected under the "chargeback" scheme.
- You probably won't be covered by your insurance. While there is no single rule, most policies will not cover airline failure or insolvency but it's worth checking with your insurer.
The pilots' union Cockpit said the Air Berlin news came as a shock and accused Etihad of making the wrong strategic and management decisions, and turning its back on Air Berlin workers.
The news of Air Berlin's bankruptcy comes just over a year after the Lowcostholidaysgroup went bust.
When the travel firm announced it was stopping trading in July last year, it had 27,000 passengers in resorts across the globe and more than 110,000 customers with forward bookings for the peak summer months and beyond.
