Air Berlin, Germany’s second largest airline, has filed for bankruptcy. This is the result of a decision by Etihad Airways, its biggest shareholder, to withdraw support for the German airline. Air Berlin’s business has been experiencing a downward slide, and Etihad now feels that further financial support would not be sustainable.

However, Air Berlin will not shut operations immediately, which is a relief for 80,000 passengers that the airline ferries each day. The government has come to its rescue by approving a loan of 150 million euros, which would be enough for the airline to continue operations for the next three months. The loan is only a temporary measure, following which the airline would have to make a decision on how it wants to dispose of its assets.

Abu Dhabi-based Etihad was disappointed with the filing for bankruptcy because it had supported Air Berlin for almost six years. However, experts say that Air Berlin was facing increasing competition from other low-cost operators like Ryanair and EasyJet, and from the no-frills operations of major airlines.

Reports indicate that Carsten Spohr, CEO of Germany’s largest airline Lufthansa, is already in talks to acquire part of Air Berlin.