Germania takes legal action against gov't for Air Berlin aid

Germania airline filed a lawsuit here on Tuesday to stop the 150-million-euro (180 million U.S. dollars) emergency credit recently granted to its insolvent rival Air Berlin by the German government.

The Berlin district court has received a request for summary proceedings to address the matter quickly, a judicial spokesperson confirmed.

Germania hopes to prevent Air Berlin from receiving a loan before the European Commission formally approves the state aid.

The plaintiff believes that the government guarantee awarded to the bankrupt airline was not merited by a market-conform financial return, according to the court, citing the lawsuit. Germania further wants to reverse the distribution of funds already paid until the European Commission's competition authorities arrive at a verdict.

The legal action is directed at the national ministries of finance, economics and transport. The German federal government is accused of acting partially towards to the airline Lufthansa and seeking to enhance its already dominant position in the domestic civil aviation industry.

Officials were allegedly bent on creating a "German champion" by facilitating the transfer of valuable Air Berlin assets to Lufthansa. Such a state intervention would harm competition in the market and ultimately also consumers. Court proceedings are due to commence on Sept. 15.

Berlin has justified the emergency credit by arguing that the funds were needed to enable the continued operation of flights over the next months and thus prevent German tourists from being stranded abroad during their holidays. So far, none of the money has been paid out, with officials commenting that the loan was still undergoing its "technical implementation."

The financial assistance is further intended to win time to find a buyer for Air Berlin who can ensure its survival. Several airlines, including Lufthansa, easyJet, and Condor have expressed interest in acquiring at least parts of the insolvent carrier.

Although Air Berlin has racked up a multi-billion euro mountain of debt with years of losses, its landing rights at Berlin and Duesseldorf airports, as well as its profitable Austrian subsidiary Niki, are considered to be highly-prized assets in the industry.

In a sign of a potential sale's high stakes, Ryanair and entrepreneur Hans Rudolf Woehrl have independently accused the German government of conspiracy to benefit Lufthansa after publicly declaring their interest in a takeover. Former Formula 1 legend Niki Lauda said Monday that he too was considering re-acquiring the Air Berlin subsidiary, which he originally founded and bears his name.

Meanwhile, Berlin Mayor Michael Mueller, Air Berlin's workers council, and the trade union ver.di joined forces to demand that stakeholders place a greater emphasis on saving as many jobs as possible. Mueller noted that he would not welcome a Ryanair acquisition as he viewed the Irish carrier as an "employee-unfriendly" firm which operated with a "proto-capitalist" business model.

Air Berlin is the country's second largest airline and employs around 8,600 people.