DUBAI, Aug. 15 (Xinhua) -- Etihad Airways, the national carrier of the United Arab Emirates (UAE), said on Tuesday it was extremely disappointed at the bankruptcy filing of its important business partner Air Berlin, the second largest German airline.
"This development is extremely disappointing for all parties, especially as Etihad has provided extensive support to Air Berlin for its previous liquidity challenges and restructuring efforts over the past six years," Etihad, which owns nearly 29.2 percent of Air Berlin, said in a statement.
Air Berlin said Tuesday it has started insolvency procedures, while it will continue operations with the help of a EUR150 million (176.29 million U.S. dollars) loan provided by the German government. The loan can uphold operations for at least three months, the carrier said.
Etihad said that in April this year, it provided Air Berlin EUR 250 million (293.82 million dollars) of additional funding. However, Air Berlin's business has deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges and from implementing alternative strategic solutions.
Air Berlin suffered losses of EUR1.2 billion (1.41 billion dollars) for the last two years, German media reported.
Aviation analysts said the Berlin-based carrier failed to cope with the stiff competition from Germany's biggest carrier Lufthansa AG, which is fully privatized and stock-listed.
Etihad said that it has a commercial relationship with Air Berlin across a range of areas, including codeshare operations, and will support Air Berlin's management during these difficult times.
Etihad bought its stake in Air Berlin in 2011 in line with its strategy to expand globally under former CEO and President James Hogan masterminded. Hogan who took the helm at Etihad in 2006, was replaced by Ray Gammel as CEO in May this year.
