(Reuters) – The European Commission on Monday approved a German bridging loan for Air Berlin that will keep the insolvent airline’s planes flying while it tries to find buyers for its assets.
Air Berlin, Germany’s second-largest airline, filed for bankruptcy protection in August after shareholder Etihad Airways withdrew funding following years of losses.
The government pledged a 150 million euro ($179 million) loan to prevent Air Berlin’s planes from immediately being grounded, which would have stranded holidaymakers abroad and put around 8,000 jobs at risk only weeks before a national election.
“The measure will allow for the orderly wind-down of the insolvent airline Air Berlin without unduly distorting competition,” the Commission said in a statement.
The money will last at most until mid-November, which means the pressure is on to agree a carve-up of Air Berlin, whose assets include about 140 leased aircraft and valuable take-off and landing slots in Germany.
German flagship carrier Lufthansa has government backing to take over large parts of the airline. Britain’s easyJet and Thomas Cook’s Condor are also seen as likely bidders.
HSBC analysts said they expected Ryanair, which has said it is not bidding for Air Berlin assets, to also expand its capacity in Germany after Air Berlin is split up.
British Airways owner IAG may snap up any A320 or A330 aircraft left over at low lease prices following the carve-up, they added.