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#Air Berlin files for insolvency after #Etihad withdraws support

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Air Berlin (AB1.DE), Germany's second-largest airline, filed for bankruptcy protection on Tuesday after key shareholder Etihad Airways withdrew funding following years of losses, leaving valuable runway slots up for grabs.

The move offers Lufthansa (LHAG.DE) and rivals a chance to acquire slots at airports such as Berlin Tegel and Duesseldorf, with Germany's largest airline keen to defend its domestic position against expansion by low-cost rival Ryanair (RYA.I).

Lufthansa confirmed it was in talks to take over parts of the business, while a source said easyJet (EZJ.L) was the second airline referred to by the government as being in talks with Air Berlin. The British budget carrier declined to comment.

The insolvency comes with thousands of Germans enjoying summer holidays, and just ahead of a September general election.

The German government has granted a bridging loan of 150 million euros (136.81 million pounds)to allow Air Berlin to keep its planes in the air for three months and secure the jobs of its 7,200 workers in Germany while negotiations continue.

The government said it expected decisions to result from these negotiations in the coming weeks.

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Lufthansa has already leased Air Berlin planes to provide flights by its Eurowings budget airline and has made no secret of its interest in taking on more of Air Berlin's business while being mindful of the potential obstacles posed by debts and anti-trust issues.

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