Published on Wednesday, August 16, 2017

Ryanair lodges complaint after Air Berlin files for insolvency

Ryanair has lodged competition complaints in Germany and with the European Commission accusing the German Government, Lufthansa and Air Berlin of a 'manufactured insolvency' of Air Berlin.

In a statement, it claims there is an 'obvious conspiracy' being played out in Germany between the German Government, Lufthansa and Air Berlin to 'carve up Air Berlin's assets, while excluding major competitors and ignoring both EU competition and State Aid rules'.

It said given the fact that the German Government is centrally involved in these 'manoeuvres', the Bundeskartellamt, Germany's competition authority is 'likely to struggle to get out of bed'.

"On this basis, and bearing in mind the scale of the market shares and the European implications involved, it is all the more important that the European Commission takes immediate and decisive action," said the statement.

"This manufactured insolvency is clearly being set up to allow Lufthansa to take over a debt-free Air Berlin which will be in breach of all known German and EU competition rules."

Air Berlin filed for insolvency yesterday after Middle East airline and major shareholder Etihad Airways withdrew its financial support.

The airline will continue to fly, propped up by €150 million of German government loans, while it seeks a long-term rescue deal. German national airline Lufthansa and another, as yet unidentified airline, are in talks to salvage part of the budget carrier.

In a statement, Etihad said: "We have been informed that airberlin has filed for administration.

"This development is extremely disappointing for all parties, especially as Etihad has provided extensive support to Air Berlin for its previous liquidity challenges and restructuring efforts over the past six years.

"In April this year, Etihad provided €250 million of additional funding to Air Berlin as well as supporting the airline to explore strategic options for the business.

"However, Air Berlin's business has deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges and from implementing alternative strategic solutions.

"Under these circumstances, as a minority shareholder, Etihad cannot offer funding that would further increase our financial exposure. We remain open to helping find a commercially viable solution for all parties.

"We expect Air Berlin operations to continue during administration. We have a commercial relationship with Air Berlin across a range of areas, including codeshare operations, and we will support Air Berlin's management during these difficult times.

"Germany is an important market for Etihad and Abu Dhabi, and we remain committed to providing comprehensive air links as a key enabler of trade and tourism."

Etihad also withdrew support from Alitalia earlier this year after workers rejected a €2 billion refinancing plan for the Italian airline, prompting it to start bankruptcy proceedings.

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