German taxes and regulations blamed for Air Berlin troubles
The German tourism body has blamed the country’s taxes and regulations for providing too benefitial conditions to foreign carriers, thus impacting Air Berlin. While local authorities are blaming each other, the $150 million government loan is still not paid out, while the pool of possible Air Berlin buyers shrinks, as investors, dissatisfied with the sale process, back out.
"Conditions distorting competition allow foreign competitors to carve out an increasingly large part of passenger volume," said President of the federal association of Germany's tourism sector Michael Frenzel, as quoted by Reuters.
Ryanair strongly opposes the possible Air Berlin takeover by Lufthansa and the participation of the German government in the matter. In August, Ryanair filed competition complaints with the German Bundeskartellamt and the European Commission regarding the alleged conspiracy between the German Government, Lufthansa and Air Berlin to carve up Air Berlin’s assets, while excluding other competitors.
But it is not just Ryanair that is unhappy with the sale process. German investor Hans Rudolf Woehrl stepped back from the bid for the bankrupt airline after he was asked to sign a confidentiality agreement to look into Air Berlin’s books – a move, which was incompatible with the situation of the lone investor who was looking for cooperation, as he claims.
Concerns are also raised about the fact that the troubled airline has not yet received the government aid as promised back in August 2017. According to the New York Times, the Economy Ministry admits that the bridge loan has not been paid out yet, but claims it is not behind schedule.
Air Berlin, Germany’s second-largest airline, was coping with considerable financial difficulties in the past time. However, it was only after its main shareholder Etihad withdrew its financial support, Air Berlin filed for insolvency on August 15. The move was supported by both the German government, which agreed to provide €150m of State Aid to keep it afloat, as well as Germany’s main carrier Lufthansa, which is now first in line to take parts of the business.