Three airlines interested in Air Berlin assets, CEO says

(AFP) Air Berlin is in talks with three competitors about buying up its assets, the insolvent airline's boss said on Thursday, adding that not all jobs would be saved.

"Aside from Lufthansa, we are in contact with two other interested parties from the aviation industry," Air Berlin Chief Executive Thomas Winkelmann told the Frankfurter Allgemeine Zeitung newspaper.

The negotiations have been going on for weeks, he said, and all three airlines were financially sound and large enough "to offer Air Berlin a secure future" while keeping Germany as an operations hub.

He did not name the other two airlines, but EasyJet has long been eyeing Air Berlin and German media have speculated that Thomas Cook subsidiary Condor is the third party.

Air Berlin was forced to file for insolvency on Tuesday after main shareholder Etihad suddenly ended its financial support for the loss-making airline.

The government stepped in with a €150-million bridging loan to keep Germany's second-largest airline flying for the next three months, saying it did not want to leave tens of thousands of holidaymakers stranded.

Winkelmann said he aimed to strike a deal with at least two of the interested buyers by the end of September, with Air Berlin's landing rights considered particularly valuable and the fate of Austrian subsidiary Niki also under discussion.

"We won't be able to save all jobs," the newspaper quoted Winkelmann as telling employees in staff meetings.

The airline, sometimes dubbed the "Mallorca shuttle" for its popularity with German tourists headed for Spanish beaches, employs some 8,000 people.

It has long battled for survival, booking losses amounting to €1.2 billion over the past two years and relying on cash infusions from Etihad.

But the government's intervention, just weeks before a September 24 general election, to keep Air Berlin flying for now has come in for criticism.

Low-cost rival Ryanair has lodged complaints with German and European competition regulators, slamming what it called a "conspiracy" between the government, Lufthansa and Air Berlin to carve up the insolvent carrier's assets.

Foreign Minister Sigmar Gabriel defended the move, saying the financial lifeline was needed to prevent 80,000 travellers a day from being stranded during the busy holiday period.

But a government official told the Handelsblatt financial daily the state aid was a clear example of electioneering.

"Eighty thousand stranded holidaymakers are almost 80,000 voters. That's how simple the political calculation is," the unnamed source said.