A few days ago I wrote about how airberlin filed for insolvency, after Etihad withdrew its financial support. There’s no need to panic immediately, as the German government is giving the airline an emergency loan of 150 million Euros, which is expected to last them for a few months. Hopefully they are able to restructure and continue to operate in one form or another after that date.
While there aren’t immediate impacts as far as their operations go, there are some interesting side effects due to the difference between “old debt” and “new debt.” As I wrote about yesterday, airberlin tickets issued through August 15 can no longer be refunded, even if someone paid extra for a refundable ticket (originally August 11 was the cutoff, but that has been changed to August 15). That seems crazy, but as FlyerTalk member ralfkrippner explained:
German insolvency law distinguishes “old debt” from before the filing date from “new debt.” New debt has a higher status und thus the management would violate insolvency law and be personally liable if they pay out funds to creditors with “old debt” before the final liquidation of the company and its assets with a quota part payment. And tickets issued before filing date Aug. 11 are definitely old debt. Besides from that the acceptance of such tix for transport is also a violation but it probably was the first decision of the official insolvency procurator to honour old tix for transportation as otherwise the company would shut down immediately without any potential for continuation and therefore chance of upholding value of assets.
This isn’t the only change happening for those with existing tickets, though. The EU has strict compensation guidelines when airlines have flight delays, where you’re potentially entitled to up to 600EUR of cash compensation for a delay. For flights through August 15, 2017, airberlin won’t pay compensation for delayed flights. Per airberlin’s FAQs:
DO I STILL RECEIVE REGULATIONS FOR MY CLAIM FOR DAMAGES / COMPENSATIONS, E.G. FOR DELAYS OR FLIGHT CANCELATIONS?
No. Unfortunately no compensations will be paid for flights before August 15th, due to effective insolvency regulations. Affected passengers have the opportunity to file the claim for the insolvency schedule after the opening of the insolvency proceedings. For all flights after August 15th kindly refer to our online claim form provided by our Guest Relations Team.
Like I said, I get why this is happening, though it’s still so strange to me that this is legal. The good news is that going forward flights will be refundable (per the fare rules) and also eligible for EU compensation, given that this would be considered “new debt.”
(Tip of the hat to @FlyingDutchBlog)