EU approves state aid to Air Berlin

The European Union competition watchdog has approved Germany's plan to provide troubled low-cost carrier Air Berlin with a €150m loan.

The European Commission, which polices EU state aid rules, said the loan "will allow for the orderly wind-down of the insolvent airline Air Berlin without unduly distorting competition".

The Commission also said the move would help protect the interests of air travellers.

Air Berlin, Germany's second-largest carrier, said last month that it was filing for bankruptcy after its main shareholder, Abu Dhabi-based Etihad, decided to cut its financing.

To allay travellers' fears they might be stranded on summer holiday, the government announced that it would provide a loan so the airline could continue flights for the time being.