Air Berlin announces new turnaround measures, shares rise
BERLIN (Reuters) - Loss-making German airline Air Berlin presented new measures to return to profit, including fleet cuts, route changes and plans for closer cooperation with alliance partners, helping to boost its shares in Thursday.
Germany's second largest airline, which late on Wednesday reported a second-quarter net profit for the first time in five years, said it was aiming for a sustainable profit with a secure margin in three years' time.
"If we say sustainable it means on a net level and with a certain margin. It doesn't mean that we would only cross into profitability in the third year, it could be earlier," Wolfgang Prock-Schauer said on a call with analysts.
Air Berlin made its first annual net profit in five years in 2012, but only after 29-percent shareholder Etihad bought a majority stake in its frequent flyer programme.
Shares in the group, which are no longer listed in any major indices in Germany after plummeting over the last 18 months, were up 8.6 percent at 10.58 BST.
Air Berlin, which made a name for itself with the 'Majorca shuttle' ferrying sun-seeking Germans to Palma, built up debts after a rapid expansion and has been bailed out thanks to cash injections from Etihad, the most recent of which came in April in the form of 300 million euros (240 million pounds) in convertible bonds.
It has also been hurt due by the much-delayed opening of Berlin's new airport, which Air Berlin had hoped to use as a hub to link short-haul and long-haul flights and for which there is still no new opening date.
Air Berlin said it plans to concentrate on 10 major cities within Germany, Austria and Switzerland, although it will continue flying from smaller airports to Palma.
Around 100 pilots will also have to move to either Berlin or Duesseldorf as it shuts down five crew stations in Muenster, Dortmund, Hanover, Erfurt and Dresden.
It will provide more details of the restructuring, including details of which planes it will seek to remove from its fleet and possible cooperation with Etihad-backed Alitalia [CAITLA.UL], in September.
(Reporting by Victoria Bryan and Peter Maushagen; Editing by Jonathan Gould and Maria Sheahan)
