The creditors of Air Berlin decided to go ahead with a lawsuit against Etihad Airways, which used to be the biggest shareholder of the now insolvent airline, insider source told Reuters. Air Berlin’s administrator Lucas Flöther said he is engaged in assessing the claims that could potentially excess €1 billion in damages.
According to Flöther, the Gulf carrier, which held a 29% stake and was the biggest shareholder of Air Berlin, failed to honor their commitment. Etihad was funding the airline since becoming its shareholder and in April, 2017, it sent a letter of support to Air Berlin, claiming it would continue the funding for upcoming 18 months.
However six months later, in August, 2017, the United Arab Emirates flag carrier cut off the German airline, which had to file for bankruptcy as a result. Etihad reasoned that the German airline’s business “deteriorated at an unprecedented pace”.
Reuters report that creditors of Air Berlin asked the administrator to find a firm to finance the planned litigation. NTV reports that the litigation process must be financed externally, since Flöther does not have the necessary five million euros for the proceedings. The insider source claims that the administrator is now trying to find a financier through a tender on behalf of the creditor’s committee.
“The claims against Etihad are potentially the most important asset in the process,” Air Berlin’s administrator told Süddeutsche Zeitung. However, whether the court will find Etihad’s letter to be legally binding – remains uncertain.
Air Berlin suffered financial losses almost every year since 2008. In 2016, the airline reported a record €782 million loss, which increased another €293.3 million at the beginning of 2017. Despite massive losses the carrier continued selling tickets. Six weeks before going into administration, the airline’s bookings stood at €856 million.
After Air Berlin filed for insolvency in August 2017, German government stepped in providing the carrier €150 million to keep planes in the air for another three months. This was to prevent thousands of passengers getting stranded as a result and to secure jobs for 7,200 workers in Germany.
Air Berlin’s assets were divided between Lufthansa, EasyJet and Niki Lauda’s Laudamotion.
Source – AeroTime