The Germans are waiting to go to the polls this September, and the voters hold the future of Chancellor Angela Merkel who has been in power since 2005, in their hands. As fate would have it here comes something they might have expected just not at this time.
The second largest air carrier in Germany, Air Berlin with a market capitalization of 100.33 million euros of has filed for insolvency and their shares are currently down by 27.24 percent. Etihad withdrew financial support from them after providing 250 million euros which didn't do much to help in terms of supporting the airline.
Air Berlin is not the only casualty from Etihad removing its financial backing. Etihad is on an increased trajectory of letting go of more financial obligatory companies in a bid to retain good ties in the European market and not go down with the sinking ships.
In any case, if they are to make the impact they want for themselves as a company and for other airlines too they must remain profitable for Etihad. This is especially because according to Skytrack, the World Airlines Awards fondly known as the Oscars of the aviation industry, named Qatar Airways the best airline in 2017. It has won it four times, and Etihad was number 4 on the list this year, though they have won the award 7 times so far.
Government to keep Air Berlin afloat for a while
Air Berlin, although it has already filed for insolvency still has the government to hold it's back for a little while as Berlin has, according to Reuters, granted them a bridging loan of 150 million euros which will allow Air Berlin to keep operating for the next three months, including catering for its 7,200 employees as negotiations continue.
Now there is something that goes along the lines of quality and appreciation to be determined by the duration the objects lasts. That comes into play on many occasions and this time it is in relation to Air Berlin and the way that 10 years ago its shares were valued at 1 billion euros. These have dropped down to selling for 0.47 euros per share, valuing the company at 45 million euros.
Lufthansa the largest airline in Germany which has its eyes set on acquiring assets from the crumbling Air Berlin has its shares selling at 20.15 euros which is a 2.5 percent rise from the previous valuation. This can be better explained by the fact that since 2008 through 2016, the airline was approximated to have been losing 2 million euros a day. In 2016 they reported an accumulated loss of 782 million euros.
Air Berlin not the only but rather the latest casualty
Four months ago Etihad was once again busy cleaning house as it cut Alitalia SPA that is located in Italy. The Rome based airline had for the second time in a decade, filed for bankruptcy, this time coming after its workers refused a 2 billion euro refinancing that had the catch of cutting 1,600 jobs.
This reduced Etihads belief in the company's competency and led to their withdrawal from the investment.
