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Air Berlin Wants Damages from Etihad

Airberlin is seeking to be monetarily compensated by part-owner Etihad for allowing the airline to go bankrupt.

Airberlin recently told a German newspaper that it’s seeking damages from Etihad Airways, the airline’s part-owner, for allowing airberlin to go bankrupt – to the tune of at least $11.8 million.

“We are in negotiations with Etihad and hope to reach a general settlement soon,” Air Berlin administrator Frank Kebekus told the Rheinische Post on Saturday, the Times of Oman reported. “We are hoping for a two-digit million euro sum.”

Airberlin declared bankruptcy in August when Etihad pulled its funding from the airline. Etihad owned about 30 percent of airberlin, and the withdrawal delivered a deadly blow to the airline. The troubled carrier expects that flights will stop on October 28 at the latest, causing about 4,000 workers to lose their jobs unless a transfer company is set up to temporarily employ them as they look for other work.

After Etihad’s removal from airberlin, a government loan of about 150 million euros helped the airline stay flying. Kebekus believes that the sum could be repaid once airberlin receives proceeds from an assets sale last week to Lufthansa.

“We will in all likelihood repay the loan including interest of around 10 percent,” Kebekus told the Rheinische Post.

Unfortunately, that means holders of airberlin bonds (there’s about 600 million euros worth outstanding right now) may be out of luck – Kebekus said that first the loan will be paid off, and then airberlin’s own staff will need to be paid, plus debts owed to others.

[Photo: Shutterstock]

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texmanufan October 25, 2017

A good lesson here: no good deed goes unpunished.