Etihad Airways has backed a ‘fundamental’ restricting programme at airberlin by providing EUR300 million (US$416m) in convertible bonds.
The Abu Dhabi-based carrier has put faith in its German partner as it looks to make radical changes after losing more than US$1 billion in the last six years.
In 2013 the airline posted a loss of US$321.6m but was successful in reducing costs by US$277.4m.
Etihad will retain the same stake in airberlin at 29.21% with the German carrier to issue a further bond of a minimum US$208m for financing purposes.
Under the new business model airberlin will appoint a chief restructuring officer to oversee the reorganisation of its capital structure and secure the airline for the long-term.
“The airline is clearly in a very challenging position. However, we are confident the business is moving in the right direction, and can be turned around but it needs an accelerated and fundamental restructuring. airberlin has our full support in this process,” said James Hogan, president and CEO of Etihad.
“We’re here for the long term – for the airline, the travelling public and the community. With the right strategic vision, and the right implementation, Etihad Airways believes airberlin can become a sustainably profitable business, securing the jobs of its 8,900 employees and the many thousands more workers it indirectly supports,” he added.
Etihad and airberlin started their partnership in 2011 and have since more than doubled flights between Germany and the UAE. The German market has overtaken the UK as Etihad’s top outbound European market, with the pair carrying 560,000 passengers on each other’s aircraft in 2013.