Etihad Airways (EY, Abu Dhabi International) has won a legal battle in the United Kingdom in which Air Berlin (1991)'s insolvency administrator was claiming EUR500 million euros (USD543 million) in damages against its debt-laden former UAE shareholder.

In a decision on February 15, 2022, the UK Supreme Court refused permission to appeal to Air Berlin insolvency administrator Lucas Flöther, saying his application did not raise an arguable point of law.

Consequently, Flöther was no longer demanding compensation from Etihad, reported German newspaper Berliner Morgenpost, quoting an announcement made by his spokesperson on April 11. Flöther did not see sufficient prospects of success for his lawsuit in the UK, the report said.

Flöther first sought recourse in German courts, but the Federal Court of Justice (Bundesgerichtshof – BGH) in May 2012 also dismissed his appeal.

Etihad Airways in January 2019 had brought its own action before the High Court of Justice in London, seeking relief from the administrator's claims for damages.

The UAE carrier had acquired 29.1% shareholding in Air Berlin – a UK public limited company with a registered office in London - for EUR72.9 million (USD79.2 million) in 2011 under an agreement governed by English law and which contained an exclusive jurisdiction clause under English courts. Between 2011 and 2016, Etihad Airways had pumped a further EUR721 million (USD783 million) into Air Berlin, through equity or debt finance provided under English jurisdiction.

Air Berlin – which had a long history of financial difficulties – was continuously looking to Etihad Airways for financial support.

In 2017, Etihad Airways provided Air Berlin with a “Comfort Letter”, promising to provide EUR350 million (USD380 million) in financial assistance, stating it would provide the necessary support to Air Berlin to enable it to meet its financial obligations as they fell due for 18 months from the date of the letter.

From May to July 2017, Air Berlin had encountered severe operational challenges resulting in Etihad Airways disbursing EUR250 million (USD271 million) to the carrier. Still, at the end of July 2017, Air Berlin indicated it needed additional financing of close to EUR1 billion (USD1 billion) through to 2020. On August 9, 2017, Air Berlin made a further draw-down request of EUR50 million (USD54 million), but Etihad Airways refused further funding. On August 15, 2017, Air Berlin filed for insolvency to the Berlin court and ceased operations on October 27, 2017.

Etihad Airways itself posted a loss of USD1.87 billion for 2016, blaming USD808 million of losses on financial exposure to partner airlines such as Air Berlin and Alitalia (AZA, Rome Fiumicino). The UAE airline has since restructured, focusing on its core business to become a mid-sized carrier.