August 29, 2017 / 4:14 PM / a year ago

Legal challenge won't delay state aid for Air Berlin - ministry

BERLIN, Aug 29 (Reuters) - A legal challenge against Berlin’s decision to grant a state bridging loan for insolvent airline Air Berlin won’t stop dispersal of the funds, the German government said on Tuesday.

“The submission of the application ... has no suspensory effect,” the economy ministry said in a statement, adding that Berlin expected the European Commission to approve the loan.

Rival German airline Germania on Tuesday asked a Berlin court to block the bridge loan until the European Commission has given its go-ahead for such state aid.

Air Berlin, Germany’s second-largest airline, filed for bankruptcy protection this month after shareholder Etihad Airways withdrew funding following years of losses.

The government has agreed a 150-million-euro loan to ensure that flights continue for a period of three months and to secure the positions of the airline’s 8,000 employees in Germany. (Reporting by Gernot Heller; Writing by Michael Nienaber)

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