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KlausU
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Updated: Air Berlin to cease operations

Tue Aug 15, 2017 11:19 am

Source
http://www.spiegel.de/wirtschaft/untern ... 62831.html

looks like they will keep flying.

Klaus
Last edited by atcsundevil on Mon Oct 09, 2017 10:18 pm, edited 2 times in total.
Reason: Thread title updated
 
LGAviation
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Air Berlin has declared insolvency

Tue Aug 15, 2017 11:19 am

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KarelXWB
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Re: Air Berlin has filed for bancrupcy

Tue Aug 15, 2017 11:21 am

Story in English:

https://www.bloomberg.com/news/articles ... roceedings

German government will provide a bridging loan to allow all flights to continue to operate.
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76er
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 11:25 am

Since there is no such thing like Chapter 11 in Europe, i guess "Insolvenz" stands for liquidation?
 
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cougar15
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 11:27 am

Sad news, especially for the many old friends I have at LTU! However, long overdue, whilst unnecessary! 10 years of `Muppet show´senior management, without (clear strategic) direction, well, this is what you get.....
some you lose, others you can´t win!
 
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seahawk
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 11:28 am

Sad but unavoidable. I guess much of it will transfer into Eurowings.
 
TheSonntag
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 11:32 am

76er wrote:
Since there is no such thing like Chapter 11 in Europe, i guess "Insolvenz" stands for liquidation?


Not necessarily. German bankrupcy law has been modernised in the last 15 years, so there are certain options. Time will tell, this will be a huge proceeding.
 
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ua900
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 11:32 am

So, what's next? Transfer to Eurowings for the Airbus fleet minus Niki? Lots of room at TXL for LH / EW if AB stops flying altogether, then the likes of FR and U2 can have BER / SXF for themselves while the legacies stick to TXL.

IMO this move was overdue, and EY can show just ahead of the German elections that propping up AB over the last couple of years without being allowed a higher stake yields results similar to AZ in Italy. Sure, the German government can provide a bridge loan past the elections, but that won't keep them flying for too long, in large part because customers are deserting them at high rates. Time to sell assets to LH and get rid of the tainted name by closing down as an "independent" airline.

More of these types of setup for AB:

Eurowings 15 · Economy Class · Airbus A319
Operated by Air Berlin PLC & Co Luftverkehrs KG

@76er - European Insolvency was changed a couple years ago, it's more similar to the US Chapter 11 now.
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KlausU
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 11:33 am

Looks like they will get a loan by the federal government to keep operating. After all it's the peak of the German summer vacation. I wonder in how far the insolvency also affects NIKI, as they operate most of the holiday destinations.
 
MIflyer12
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 11:35 am

76er wrote:
Since there is no such thing like Chapter 11 in Europe, i guess "Insolvenz" stands for liquidation?


No.

Chapter 11 is a reference to relevant U.S. Bankruptcy Code. Among key features, a Ch 11 filing allows the company to keep operating while suspending rights of creditors to collect (by ceasing fuel deliveries, impounding aircraft, etc.)

Chapter 11 isn't applicable in Europe because Europe has its own bankruptcy law, but yes, there are legal statuses that companies can seek that allow them to keep operating and restructure. Here's an airline example: http://www.reuters.com/article/us-alita ... SKBN17Y115
 
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piedmontf284000
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 11:37 am

Lufthansa will buy their assets up, the few that are left, and discard the rest. The routes are about the only thing they want anyway...that and having one less competitor.
 
Someone83
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 11:41 am

MIflyer12 wrote:
Europe has its own bankruptcy law,


Germany law. Each European country has their own laws ;)
 
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juliuswong
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 11:42 am

I don't think the EU Competition would allow LH to buy up all valuable assets and slots that airBerlin has now. Monopoly is last thing EU wants in Germany. How large is easyjet or Ryanair operation in Germany?
 
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Brixerl
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 11:42 am

KlausU wrote:
Looks like they will get a loan by the federal government to keep operating. After all it's the peak of the German summer vacation. I wonder in how far the insolvency also affects NIKI, as they operate most of the holiday destinations.



Austrian newspapers state, that the austrian airline Niki is not involved.
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columba
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 11:46 am

Media reports that the Goverment has agreed on the loan because Lufthansa as well as another airline is interesting of buying parts of Air Berlin.
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anfromme
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 11:50 am

76er wrote:
Since there is no such thing like Chapter 11 in Europe, i guess "Insolvenz" stands for liquidation?

Nope. Insolvency basically means that they're declaring that they're no longer "solvent", i.e. they don't have enough money left to pay all their ongoing payment obligations, including loan repayments, fuel, salaries, etc.
In colloquial terms, insolvency is also called "bankruptcy". As with Chapter 11, there is a process behind declaring insolvency in Germany - part of that is that a trustee is usually put in place who overlooks a restructuring, sale of some company parts or whatever is needed to exit insolvency. Air Berlin, though, have filed for insolvency with the explicit wish of administering the process themselves rather than controlled by a 3rd party trustee. When Air Berlin's current CEO Wineklmann took over in February, the expectation was widely that's he'd essentially be tasked with preparing a sale of AB to LH. Declaring insolvency would just be part of that, and it would make it a bit easier to strike a deal with creditors, as LH (or any other investor) wouldn't be that keen on taking over AB's debts.

Insolvency in Germany doesn't imply one way or another what exactly is going to happen to the company, though.
There are examples of companies that were liquidated/broken up under insolvency law, and some that were trimmed down/sold to new investors/etc. and continue to operate to this day.
Past examples of German companies declaring insolvency were Schiesser (one of the largest German makers of underwear) who found a new investor in 2009 and are now doing better than ever before, or Karmann (who produced the gorgeous Karmann Ghia in the 50s, 60s and 70s) who were broken up with their main assembly lines taken over by Volkswagen who are now producing Porsches and Golf convertibles there.

It's really anyone's guess what's going to happen with Air Berlin now - they'll keep flying for now thanks to additional credit lines from the government and others. Likeliest scenario seems to be sale to another airlines group. That said, a sale to Lufthansa Group (who've shown interest in the past) might run into antitrust issues.
Keeping the airline operational is also likely to increase chances of another airline investor (LH or other) showing interest in the airline's assets.

Someone83 wrote:
MIflyer12 wrote:
Europe has its own bankruptcy law,


Germany law. Each European country has their own laws ;)


In reality, it's a mix of the two. There's German insolvency law, but there are European regulations that apply as well, not least with regard to antitrust concerns. EU antitrust law was one of the main reasons Ryanair wasn't allowed to take over Aer Lingus on at least one occasion, for instance (although Aer Lingus wasn't bankrupt at the time).
Last edited by anfromme on Tue Aug 15, 2017 12:08 pm, edited 3 times in total.
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mxaxai
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 11:50 am

76er wrote:
Since there is no such thing like Chapter 11 in Europe, i guess "Insolvenz" stands for liquidation?

That is not entirely correct. Filing for bakruptcy, i. e. "Insolvenz", can mean that business is continued if that will likely return the most investment for the creditors. Usually, that is not the case and the company is shut down and its assets are sold. Sometimes, parts of a company are split off and continue on their own or are sold to other investors, similar to what happened to Swissair. Overall, I expect just that to happen here too:
Step1: Get a state loan to continue operating and avoid leaving passengers on their own
Step2: Slim the operation further if considered necessary and shut down all routes that are not profitable on their own
Step3: Sell parts to other airlines. Most likely, this will be a take-over by Lufthansa in one way or another (e. g. via Eurowings), assuming there is no objection by antitrust authorities.

I am not sure what the british registration of the company means for this process, though. Perhaps airberlin is subject to british bankruptcy rules but they shouldn't be too different.
 
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ua900
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 11:55 am

juliuswong wrote:
I don't think the EU Competition would allow LH to buy up all valuable assets and slots that airBerlin has now. Monopoly is last thing EU wants in Germany. How large is easyjet or Ryanair operation in Germany?


Germany is far from monopoly when combining AB and LH. Ryanair and Easyjet (and Wizz, Vueling and all the other ULCCs) have a sizable presence in the EU and Germany is no exception.

LH group will focus on the leased AB assets already flying for EW and OS at present, plus whatever else they can get, notably the A330s for EW long haul ops, perhaps combined with SN. LGW assets are perhaps a good fit for OS since they already run an extensive and successful Dash 8 operation out of VIE.The asset sale will pass review without a hitch, lots of jobs are on the line and AB already does extensive flying for LH group today, all of that passed reviews too.

Niki ops can become the new face of EY in Europe, along with Darwin and JU, smaller sinkhole then before for EY but nonetheless a perpetual money loser ;-)
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PanHAM
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 11:56 am

juliuswong wrote:
I don't think the EU Competition would allow LH to buy up all valuable assets and slots that airBerlin has now. Monopoly is last thing EU wants in Germany. How large is easyjet or Ryanair operation in Germany?


Where do you see a Monopoly? The playing field is not Germany but the EU sinle market and ECAA. If LH acquires parts or all of AB they will have to give away some Slots. But Germany itself is a wide and open market. Niki for instance has abou 6 A321 based in DUS, FR is here, TUI Fly, Germania plus a number of start-ups.
Ryanar has a market share of 8% and increasing. Easy has a bit less and Niki is already a separate corporation, not affected by the insolvency
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par13del
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 11:58 am

So unlike US Chpt.11 where the courts adjudicate the financial dealings between the company and the investor, the government steps in with money to make themselves a creditor so that the company can continue operations while a decision is made, is this a bailout by default?
 
TheGeordielad
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:03 pm

ua900 wrote:
juliuswong wrote:
I don't think the EU Competition would allow LH to buy up all valuable assets and slots that airBerlin has now. Monopoly is last thing EU wants in Germany. How large is easyjet or Ryanair operation in Germany?


Germany is far from monopoly when combining AB and LH. Ryanair and Easyjet (and Wizz, Vueling and all the other ULCCs) have a sizable presence in the EU and Germany is no exception.

LH group will focus on the leased AB assets already flying for EW and OS at present, plus whatever else they can get, notably the A330s for EW long haul ops, perhaps combined with SN. LGW assets are perhaps a good fit for OS since they already run an extensive and successful Dash 8 operation out of VIE.The asset sale will pass review without a hitch, lots of jobs are on the line and AB already does extensive flying for LH group today, all of that passed reviews too.

Niki ops can become the new face of EY in Europe, along with Darwin and JU, smaller sinkhole then before for EY but nonetheless a perpetual money loser ;-)

They don't own Darwin anymore it was sold to Adria airways and will become Adria airways Switzerland.
 
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anfromme
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:04 pm

PanHAM wrote:
juliuswong wrote:
I don't think the EU Competition would allow LH to buy up all valuable assets and slots that airBerlin has now. Monopoly is last thing EU wants in Germany. How large is easyjet or Ryanair operation in Germany?


Where do you see a Monopoly? The playing field is not Germany but the EU sinle market and ECAA. If LH acquires parts or all of AB they will have to give away some Slots. But Germany itself is a wide and open market. Niki for instance has abou 6 A321 based in DUS, FR is here, TUI Fly, Germania plus a number of start-ups.
Ryanar has a market share of 8% and increasing. Easy has a bit less and Niki is already a separate corporation, not affected by the insolvency


It's more complicated than that - it's not just one playing field but multiple ones. Germany is one of them. Or maybe just DUS if LH buying AB was to create an overwhelming presence there. Any LH deal to buy AB would be subject to close scrutiny and I would absolutely expect LH to have to make some concessions, e.g. by giving up slots or similar. With that said I doubt that there is going to be a complete showstopper - the only group other than LH that I could see showing interest in AB would be OneWorld partners IAG who could use them to gain, post-Brexit, an airline that is a bit more centrally located than IB, who are chiefly established in the South, with excellent connections to South America.
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PanHAM
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:04 pm

columba wrote:
Media reports that the Goverment has agreed on the loan because Lufthansa as well as another airline is interesting of buying parts of Air Berlin.



This is a planned incolvency where the bridging loan was already agreed, essential to Keep the AOC. The a/c flying for EUW and LH Group are not involved as well. Will be interesting to see how much LH will finally pay for the Airline and under which Name it will operate
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YIMBY
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:09 pm

TheSonntag wrote:
76er wrote:
Since there is no such thing like Chapter 11 in Europe, i guess "Insolvenz" stands for liquidation?


Not necessarily. German bankrupcy law has been modernised in the last 15 years, so there are certain options. Time will tell, this will be a huge proceeding.


It quite a lot depends on the creditors. Most legislations allow several options, from creditor takeover to liquidation, though some of those may require more unanimity than others.
The full liquidation tends to be the standard case in Europe, though.
 
lancelot07
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:09 pm

par13del wrote:
So unlike US Chpt.11 where the courts adjudicate the financial dealings between the company and the investor, the government steps in with money to make themselves a creditor so that the company can continue operations while a decision is made, is this a bailout by default?

Not really, but Merkel is about "saving" everything. And Germany has an election later this year, Merkel does not want significant parts of the electorate stranded somewhere in their holiday destinations.:D

German law allows reorganisation and liquidation, much like US Chpt. 11 and Chpt. 7.
 
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:19 pm

anfromme wrote:
PanHAM wrote:
juliuswong wrote:
I don't think the EU Competition would allow LH to buy up all valuable assets and slots that airBerlin has now. Monopoly is last thing EU wants in Germany. How large is easyjet or Ryanair operation in Germany?


Where do you see a Monopoly? The playing field is not Germany but the EU sinle market and ECAA. If LH acquires parts or all of AB they will have to give away some Slots. But Germany itself is a wide and open market. Niki for instance has abou 6 A321 based in DUS, FR is here, TUI Fly, Germania plus a number of start-ups.
Ryanar has a market share of 8% and increasing. Easy has a bit less and Niki is already a separate corporation, not affected by the insolvency


It's more complicated than that - it's not just one playing field but multiple ones. Germany is one of them. Or maybe just DUS if LH buying AB was to create an overwhelming presence there. Any LH deal to buy AB would be subject to close scrutiny and I would absolutely expect LH to have to make some concessions, e.g. by giving up slots or similar. With that said I doubt that there is going to be a complete showstopper - the only group other than LH that I could see showing interest in AB would be OneWorld partners IAG who could use them to gain, post-Brexit, an airline that is a bit more centrally located than IB, who are chiefly established in the South, with excellent connections to South America.


I think EU can accept LH+AB merger. It will not make a monopoly, but as said, they have to scrutinize all the route network and in case the new LH group gets a dominant position for any congested airport they should be required to make concessions.

IMO One world would need AB more than LH, but it would be much harder for them to restructure it as a profitable airline. (AY+AA would be better than IAG, but extremely unlikely.)
 
PanHAM
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:22 pm

Liquidation is not an issue. The copany is now uder self managed receivership This has also nothig to do with the upcoming federal elections. It was simply so that Etihad pulled the rug on very short notice.

In which case the Management must act PDQ. Keeping the cpmpany alive with a bridging loan is probably the cheapest solution for all concerned. Including the government. They won't lose a dime on this
Last edited by PanHAM on Tue Aug 15, 2017 12:29 pm, edited 1 time in total.
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:22 pm

Would IAG be interested of AB? If they would buy the assets and reorganize the airline. They might be able to put it a float again. I think that it would fit to IAG's needs in central Europe.
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AirlineCritic
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:23 pm

Strength for the employees and creditors. May it work out well for you in the end.

But, I'm also feeling sorry for us poor OW flyers. AB was an important component of the network in Europe.
 
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:25 pm

lancelot07 wrote:
German law allows reorganisation and liquidation, much like US Chpt. 11 and Chpt. 7.

Makes one wonder why there are so many knickers in a knot here on a.net when a US firm uses CH11/CH7 and now when AB does a similar thing with LH an obvious likely benefactor no one gets upset.
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helhem
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:30 pm

Sad. I wonder how much the mess with the new airport affected this. If Alitalia has been salvaged then this one deserved it more. But no one needs any zombies.
 
mxaxai
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:31 pm

PanHAM wrote:
juliuswong wrote:
I don't think the EU Competition would allow LH to buy up all valuable assets and slots that airBerlin has now. Monopoly is last thing EU wants in Germany. How large is easyjet or Ryanair operation in Germany?


Where do you see a Monopoly? The playing field is not Germany but the EU sinle market and ECAA. If LH acquires parts or all of AB they will have to give away some Slots. But Germany itself is a wide and open market. Niki for instance has abou 6 A321 based in DUS, FR is here, TUI Fly, Germania plus a number of start-ups.
Ryanar has a market share of 8% and increasing. Easy has a bit less and Niki is already a separate corporation, not affected by the insolvency

Germania is tiny. Niki is as well.
TUIFly only does low-frequency holiday flights, not comparable to many of the remaining AB routes. Condor is a similar case.
FR - so far - only has a sizeable presence at CGN and SXF.
U2 is not quite sure what to do in Germany. They have been expanding and retreating for several years now.
Norwegian - especially long-haul - could gain a lot but so far they have no significant presence in Germany.
Vueling is increasingly flying to Germany but have been rather cautious going up against LH, including a retreat from Frankfurt.

Merging AB + LH + EW + LX + OS + SN gives the group a market share of well over 50 % at almost any major airport in the german-speaking area or vicinity. There is an opportunity for other airlines to step in but it will not be easy. German aviation without a second large long-haul and business traffic oriented operator will be in a very sad state.
 
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ua900
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:32 pm

AirlineCritic wrote:
Strength for the employees and creditors. May it work out well for you in the end.

But, I'm also feeling sorry for us poor OW flyers. AB was an important component of the network in Europe.


That's probably the greatest change of the whole thing, OW in continental Europe is weakened.

PanHAM wrote:
columba wrote:
Media reports that the Goverment has agreed on the loan because Lufthansa as well as another airline is interesting of buying parts of Air Berlin.



This is a planned incolvency where the bridging loan was already agreed, essential to Keep the AOC. The a/c flying for EUW and LH Group are not involved as well. Will be interesting to see how much LH will finally pay for the Airline and under which Name it will operate


They will pay bupkes (job guarantees and taking on the leased assets) and the name will be Eurowings ;-)
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:37 pm

Insolvency transforms the whole situation. It allows the politicians to look past the antitrust laws.
There are a lot of arguments against a full takeover of Air Berlin by Lufthansa, but arguments against unemployment will probably defeat them, if Lufthansa shows interest.
 
devron
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:39 pm

mxaxai wrote:
German aviation without a second large long-haul and business traffic oriented operator will be in a very sad state.


I agree I have status with LH and AB and I am worried what this will do to prices and my ability to keep exploring the world. Ryanair might be an alternative but LH will certainly fight them.

Why did Etihad drop the ball now?
 
factsonly
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:41 pm

Air Berlin declares 'insolvency' in a peak summer month !!

August sees the highest cash flow...... this clearly indicates its financial position = pretty desperate.

Most airlines fold in February or March, at the end of a long winter........ when cash flow is at its lowest.



(we are obliged to indicate that companies in the Southern Hemisphere witness an opposite effect)
 
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ua900
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:45 pm

mxaxai wrote:
PanHAM wrote:
juliuswong wrote:
I don't think the EU Competition would allow LH to buy up all valuable assets and slots that airBerlin has now. Monopoly is last thing EU wants in Germany. How large is easyjet or Ryanair operation in Germany?


Where do you see a Monopoly? The playing field is not Germany but the EU sinle market and ECAA. If LH acquires parts or all of AB they will have to give away some Slots. But Germany itself is a wide and open market. Niki for instance has abou 6 A321 based in DUS, FR is here, TUI Fly, Germania plus a number of start-ups.
Ryanar has a market share of 8% and increasing. Easy has a bit less and Niki is already a separate corporation, not affected by the insolvency

Germania is tiny. Niki is as well.
TUIFly only does low-frequency holiday flights, not comparable to many of the remaining AB routes. Condor is a similar case.
FR - so far - only has a sizeable presence at CGN and SXF.
U2 is not quite sure what to do in Germany. They have been expanding and retreating for several years now.
Norwegian - especially long-haul - could gain a lot but so far they have no significant presence in Germany.
Vueling is increasingly flying to Germany but have been rather cautious going up against LH, including a retreat from Frankfurt.

Merging AB + LH + EW + LX + OS + SN gives the group a market share of well over 50 % at almost any major airport in the german-speaking area or vicinity. There is an opportunity for other airlines to step in but it will not be easy. German aviation without a second large long-haul and business traffic oriented operator will be in a very sad state.


When do Germans / people in German speaking areas fly?

1. Vacation to the Mediterranean > Ryanair, Easyjet, Tuifly, small Turkish vacation airline you've never heard of etc are still popular for that.
2. Leisure to European cities > This was and is the strong suit of EW / AB, but others like Norwegian, Wizz Air and Vueling are moving in, plus there's DB as a notable competitor
3. Vacation long haul > AB has a presence there, but far from dominant. LH has Jump and small EW long haul ops, but DE and lots of smaller foreign companies and large foreign legacies are still bigger there collectively.
4. Traditional business travel > Intra-EU LH group has a better soft product than most legacies, and hard product on pretty much everyone except SU and JU sucks. Long haul others get business, but of course many people are better off using a carrier that's strong at their home airport / region. I'd be better off using AF if I lived in France, BA if I lived in the UK.

As far as the mergers go, LH bailed out LX after they choked on their SN acquisition, other groups (say IAG or KL/AF could have jumped on the opportunity as well. Fact remains that like in the US or in LatAm market, 3 seems to be a magic number but still allows for many other carriers to continue flying, thus keeping things competitive.
Last edited by ua900 on Tue Aug 15, 2017 12:48 pm, edited 1 time in total.
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:45 pm

Revelation wrote:
lancelot07 wrote:
German law allows reorganisation and liquidation, much like US Chpt. 11 and Chpt. 7.

Makes one wonder why there are so many knickers in a knot here on a.net when a US firm uses CH11/CH7 and now when AB does a similar thing with LH an obvious likely benefactor no one gets upset.

Because most people here don't actually understand Chap 11 (they literally think it is the US government bailing the airline out or something), and you have people here who hilariously think that the EU governments would let the likes of IAG/LH/AF etc fail if push comes to shove, because remember bailouts are against EU rules which all EU countries follow ;) Now that it is generally the European airlines under-performing against their American peers the tune has changed some.

It is an election year in Germany, the German government is going to make sure the airline survives at least until after the election. Having thousands of stranded passengers and suddenly unemployed people is not good optics for a sitting government.
Last edited by Polot on Tue Aug 15, 2017 12:47 pm, edited 1 time in total.
 
macc
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:47 pm

They just renewed my gold status... guess I can pin it to the wall. Will other one world members honour the miles?
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lightsaber
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:48 pm

factsonly wrote:
Air Berlin declares 'insolvency' in a peak summer month !!

August sees the highest cash flow...... this clearly indicates its financial position = pretty desperate.

Most airlines fold in February or March, at the end of a long winter........ when cash flow is at its lowest.



(we are obliged to indicate that companies in the Southern Hemisphere witness an opposite effect)

Yea... Peak cash and insolvent... Time to liquidate quickly. Alas, the elections seems to be playing a role.

This begs the question of what happens to that other EY investment...

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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:51 pm

C010T3 wrote:
Insolvency transforms the whole situation. It allows the politicians to look past the antitrust laws.


How is that? AB's insolvency proceeds under German bankruptcy law but EU-wide competition law still applies.

As for German market dominance vs. EU-wide competition, competition authorities have a responsibility not to permit (or actively enable here) too much dominance in major airports. The level of competition on WAW-FCO really isn't relevant to DUS-ZRH. U.S. competition authorities go granular, looking at dominance on non-stop and single-connection route pairs.
 
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ua900
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:56 pm

macc wrote:
They just renewed my gold status... guess I can pin it to the wall. Will other one world members honour the miles?


1. You can still spend the miles while AB is around / hasn't gotten kicked out of OW.
2. EY owns TopBonus, perhaps a better question for them since the miles are their liability, not AB's ;-)
3. I'm sure LH will look at the AB elites and make them some kind of offer to come into LH, and DL / UA also offers lots of challenges and a few matches to Topbonus elite members.
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KarelXWB
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 12:58 pm

Polot wrote:
and you have people here who hilariously think that the EU governments would let the likes of IAG/LH/AF etc fail if push comes to shove, because remember bailouts are against EU rules which all EU countries follow ;)


Sure, IAG/LH/AF are worth saving, but Air Berlin? Lot's of European carriers bigger than Air Berlin have gone bankrupt in the past. Sabena was one of the biggest bankruptcies ever in Belgium history and European governments have done nothing to prevent it.
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Aisak
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 1:05 pm

anfromme wrote:
the only group other than LH that I could see showing interest in AB would be OneWorld partners IAG who could use them to gain, post-Brexit, an airline that is a bit more centrally located

Maybe not AB as a whole, but Niki is a separate entity with an Austrian AOC which could come in handy for some airlines wanting to start an operation in central Europe.
It is 48% owned by airbelin so in theory it could be an easy purchase and would mean some fresh cash for the creditors (NIKI itself being one of them)
 
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 1:10 pm

I wonder who will take over their long haul flights to the Caribbean. Condor/Thomas Cook is (by far) the largest charter operator from Germany to the Caribbean (the only big one I'm guessing).


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KarelXWB
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 1:10 pm

Regarding the loan:

A German government bridging loan for insolvent Air Berlin (AB1.DE) should be enough to ensure flights for three months, Economy Minister Brigitte Zypries said on Tuesday, adding that the loans would be paid back from proceeds of asset sales.

"We assume that Air Berlin's airport slots... can be marketed and sold and we assume that the loan can be paid back," she told journalists during a news conference.


http://uk.reuters.com/article/uk-air-be ... KKCN1AV19R
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C010T3
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 1:10 pm

factsonly wrote:
Air Berlin declares 'insolvency' in a peak summer month !!

August sees the highest cash flow...... this clearly indicates its financial position = pretty desperate.

Most airlines fold in February or March, at the end of a long winter........ when cash flow is at its lowest.


Well, not when the insolvency process is orchestrated. It' actually very smart to do that when you were able to secure all the cash you could amass.

And I thought Lufthansa would play it on the down low, so that it does not become obvious that it is orchestrated, but they came all out:

http://newsroom.lufthansagroup.com/de/m ... 017/q3/512

MIflyer12 wrote:
How is that? AB's insolvency proceeds under German bankruptcy law but EU-wide competition law still applies.


The European Commission is highly subject to political pressure.
Last edited by C010T3 on Tue Aug 15, 2017 1:14 pm, edited 1 time in total.
 
OO-VEG
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 1:13 pm

mxaxai wrote:
PanHAM wrote:
juliuswong wrote:
I don't think the EU Competition would allow LH to buy up all valuable assets and slots that airBerlin has now. Monopoly is last thing EU wants in Germany. How large is easyjet or Ryanair operation in Germany?

FR - so far - only has a sizeable presence at CGN and SXF.
.



What about HHN and NRN? those are sizeable bases and NRN is right in the backyard of DUS.

I would be interested to see what will happen now as this is both an unavoidable and interesting situation. AB leaves a European and a Transatlantic network behind. If AB would collapse entirely that's a void to fill which would be the perfect fit for Norwegian/Ryanair (swap some planes out of NRN and EIN over to DUS) and Eurowings. However, FR cannot sustain the long-haul network. Norwegian flies with different equipment and couldn't just take over AB that easily, and EW has the right cards for network/plane type and since they are German I guess it's a legally easier option. However LH has a main base at CGN with long-haul ops. What will happen to either CGN/DUS in that case? Surely EW will undress quite some services and transfer a bit to the already existing optimized CGN hub, in which case competition will strike back at DUS and takes away the market-share that's up for grabs.
 
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 1:20 pm

juliuswong wrote:
I don't think the EU Competition would allow LH to buy up all valuable assets and slots that airBerlin has now. Monopoly is last thing EU wants in Germany. How large is easyjet or Ryanair operation in Germany?


Germany doesn't think selling Air Berlin assets will be a problem:

German Transport Minister Alexander Dobrindt said he does not expect the likely sale of parts of Air Berlin to Lufthansa and to other airlines to cause cartel problems after Air Berlin filed for bankruptcy on Tuesday.

"There is no transfer of Air Berlin as a whole to Lufthansa, there are parts of the business that will go to Lufthansa and there are interested parties for other bits of the business so we do not expect cartel difficulties," Dobrindt told reporters.


http://uk.reuters.com/article/us-air-be ... SKCN1AV1E6
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GCT64
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Re: Air Berlin has filed for insolvency

Tue Aug 15, 2017 1:21 pm

C010T3 wrote:
Well, not when the insolvency process is orchestrated. It' actually very smart to do that when you were able to secure all the cash you could amass.
And I thought Lufthansa would play it on the down low, so that it does not become obvious that it is orchestrated, but they came all out:
http://newsroom.lufthansagroup.com/de/m ... 017/q3/512


Google translate:

"Lufthansa is already in negotiations for the acquisition of parts of the airberlin group with airberlin and thus also offers the possibility to the recruitment of staff. Lufthansa intends to conduct these negotiations to a quick and positive result."

As for IAG, the last BA foray into Germany (DBA) didn't go well.
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