Airline files for bankruptcy

Photo: The Canadian Press

Germany's second largest carrier, Air Berlin, is filing for bankruptcy after its main shareholder, Abu Dhabi-based Etihad, said it would make no more financing available.

The loss-making airline said Tuesday that after Etihad pulled funding, it "came to the conclusion that there was no further positive way ahead for Air Berlin."

To allay travellers' fears that they could be stranded on summer holiday, the German government immediately said it would provide a loan of 150 million euros ($177 million) so the airline it can continue flights for the time being.

"We're in a time when many tens of thousands of travellers and vacationers are in multiple international holiday spots," the Economy and Transport ministries said in a joint statement. "The return flights of these travellers back to Germany with Air Berlin would not have been otherwise possible."

Air Berlin has been posting losses for years and has a debt of 1.2 billion euros. It has recently been restructuring its operations to try and stay in business and has been kept aloft in recent years by Etihad, which holds a 29.2 per cent share.