Air Berlin was Germany’s second largest airline and the tenth largest in all of Europe prior to its bankruptcy.
The airline has two subsidiaries – LG Walter, a German regional carrier, and Niki, an Austrian low-cost carrier – that will continue to offer service.
According to the company, it is continuing talks with fellow German airline Lufthansa and British carrier easyJet. Both carriers have expressed an interest in parts of the Air Berlin business.
Air Berlin had been propped up by Gulf carrier Etihad for years. This year, Etihad decided it could no longer funnel money into an airline that was consistently losing money. Etihad had even given Air Berlin cash injections – of up to £227 million – as late as April.
Etihad was a partial owner of Alitalia, which also had to declare bankruptcy.
Air Berlin had been plagued by delays and cancellations. Under EU law, the airline had to compensate passengers.
The airline’s passenger load fell by 24 percent – from 3.22 million people to 2.44 million people – between July 2016 and July 2017.
The European Commission loaned Air Berlin €150 million for “an orderly wind-down.”
2017 has been difficult for European carriers. In addition to Air Berlin and Alitalia, Monarch has also stopped service. Monarch’s failure is the largest airline failure in British aviation history.
Passengers who purchased an Air Berlin ticket after the airline declared insolvency are entitled to an alternative flight or a full refund. However, tickets booked before the insolvency date are not eligible for refunds.
Aviation analyst John Grant believes more airlines could fail. “There are perhaps too many airlines in Europe today relative to the size of the market, with too many struggling to keep market share. In the United States, five major airlines provide some 80 per cent plus of scheduled capacity and that may be where the European market will head over time,” he said.
Airline consolidation is also expected to drive up intra-European fares.