oneworld member airberlin has among the worst-performing financials of any airline in the world. In the first quarter its operating margin was -42%. Disastrous investments in airberlin and Alitalia led to the ouster of Etihad’s CEO.
Their topbonus frequent flyer program was spun off as a separate entity with 70% sold to Etihad for about a quarter of a billion dollars. It’s not even primarily a loyalty program. It’s a financing mechanism and backdoor way for Etihad to control the airline itself in spite of foreign ownership restrictions. Etihad overpaid. On purpose.
Whenever writing about airberlin I’ve included the caveat about their offers ‘for as long as they’re flying at least’ or something similar. They’ve scaled back flying, trying to cut to stem losses. But it’s not clear they’ve had a viable plan to do so. And Etihad’s appetite for funding the operation — with a goal of feeding traffic through Abu Dhabi — has run out.
Etihad has withdrawn its financial support and airberlin has filed for bankruptcy or rather ‘insolvency’.
The discount carrier and subsidiaries submitted the filing in a local Berlin court, though it won’t seek bankruptcy protection for its Niki Luftfahrt GmbH and Leisure Cargo GmbH units, Air Berlin said in a statement. Talks with Deutsche Lufthansa AG and other parties regarding disposals are continuing, it said.
For now operations continue, though what changes will be necessary and what the future corporate structure (and partnerships) look like remain an open question.