German carrier Air Berlin aircrafts are pictured at Tegel airport in Berlin

Berlin - The move by the struggling airline forced the German government to step in to provide it with temporary credit of €150m ($176m) so as to help it continue operating.

"Air Berlin operations can be carried on to its full extent, as a result avoiding a discontinuation of the airline operation," the Ministry for Economic Affairs said in a statement. German Minister for Economic Affairs Brigitte Zypries said Air Belrin would continue to accept flight bookings.

Air Berlin said that it had applied for insolvency after it was told by Etihad that it was ending financial support after concluding that the Gulf carrier saw "no positive prospects for its continued existence."

Germany's biggest airline, Lufthansa is now in talks with Air Berlin to take over sections of operations as part of a wider restructuring of Air Berlin, which ran up a loss last year of about €782m euros and has debts totalling nearly €1.2bn.

Air Berlin said its Niki Luftfahrt GmbH and Leisure Cargo GmbH units were not part of the insolvency plan.

Trading in Air Berlin shares was suspended on the Frankfurt Stock Exchange.