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Germany

Air Berlin Bankruptcy To Cost Gov’t 200 Million Euros

A first analysis by insolvency administrators has blamed poor management for the collapse of Air Berlin.

The insolvency of Germany’s second largest airline, Air Berlin, will impose significant costs on German taxpayers, Sueddeutsche Zeitung (SZ) newspaper reported on Wednesday.

The federal government, German tax authorities and the Federal Labour Office would expect a shortfall around 200 million euros (247.6 million U.S. dollars), leaving aside other direct costs to customers and employees caused by the bankruptcy, SZ said, citing a recent internal report by the airline’s insolvency administrators which it obtained.

Air Berlin’s few remaining assets are opposed by a towering mountain of 4.4 billion euros of debt. As a consequence, its creditors are unlikely to recover much of the funds they lent to the firm. While private sector suppliers, service and leasing partners are the most affected by Air Berlin’s precarious financial situation, the German government has also provided an emergency credit facility of 150 million euros, 84 million of which are yet to be repaid.

According to the internal report, the taxpayers’ claim on Air Berlin was «not secured», a circumstance which also applied to a combined 121.3 million euros in unpaid taxes and funds received by the Federal Labour Office to ensure that the airline’s 7,200 employees’ salaries continued to be paid between August and October 2017. Furthermore, Air Berlin still owes its customers 30 million euros for cancelled flights, delays, and lost- or damaged luggage, 16.5 million euros of which are «unsecured». A spokesperson for insolvency administrator Lucas Flother said customers could not expect to be reimbursed for tickets which were invalidated by the bankruptcy. The outstanding claim...

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