Air Berlin said to weigh massive downsizing | Business| Economy and finance news from a German perspective | DW | 26.09.2016
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Air Berlin said to weigh massive downsizing

Germany's second largest airline Air Berlin is reportedly planning to reduce its fleet by half over the next months as its biggest shareholder, Etihad Airways, wants to make the loss-making carrier profitable.

German daily newspaper Süddeutsche Zeitung reported Monday, that the struggling German airline was aiming to reduce its payroll by 1,000 jobs and downsizing its fleet to about 70 airplanes by the end of 2016.

The Munich-based newspaper cited industry sources as saying, the plan was part of efforts by the carrier's biggest shareholder - Gulf airline Etihad Airways - to dispose of overcapacity at Air Berlin. For that Etihad was in talks with Germany's largest airline Lufthansa and travel company TUI aimed at taking over parts of Air Berlin.

The talks centered on selling 17 planes owned by Air Berlin's Austrian subsidiary Niki to TUIfly, the newspaper reported. In addition, Lufthansa was allegedly interested in renting 40 Air Berlin planes and crew in what's referred to as a "wet lease." This means the airline would get fixed-rate payments while Lufthansa would assume the economic risk of operating the flights.

Air Berlin and Lufthansa have so far declined to comment on the report.

Loss-making airline

Founded in 1978, Air Berlin looks back at more years of losses than profit. In the first six months of this year, the airline had already reduced its available seat-kilometers by 5.2 percent under restructuring aimed to meet a "challenging and volatile market environment." It also reduced staff y 213 to 8,656 in the period.

In its report ending the second quarter, the company predicted "greater risks than expected in May" for its business in the remainder of 2016.

"Air Berlin will counter these risks by ensuring that it rigorously continues its current restructuring program to improve efficiency and reduce costs – particularly in the operating areas and in the organizational structure," the carrier said in August.

The restructuring plan also included ending duplication of services with Abu Dhabi's Etihad Airways, which owns a 29-percent stake in Air Berlin.

uhe/kd (AFP, dpa)

 

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