7th APRIL 2015 - Vol.XXXVIII No.018
Business News

Air Berlin to reveal key revamp plan

FRANKFURT: Germany's Air Berlin, partly owned by Abu Dhabi-based carrier Etihad, will present by the end of December details of a plan to steer the loss-making airline back to profit starting next year.

Chief executive Hartmut Mehdorn said yesterday he would neither confirm nor deny German media reports that the plan, dubbed Turbine 2013, would entail some job cuts.

"But one thing is clear, we cannot avoid extraordinary measures," he said a day after Air Berlin published third-quarter results that showed operating profit rose by 4.5 per cent thanks to cost cuts. Net debt increased by 5pc over the three-month period to 853 million euros ($1.1 billion) at the end of the quarter, roughly four-and-a-half times its shareholder equity.

Chief financial officer Ulf Huettmeyer said he was confident the sale of its Topbonus frequent flyer programme would help narrow the operating loss for this year, adding he expected it would be "a bit" better than analysts' consensus for a loss of 160m euros.

Air Berlin, which has not posted an operating profit since 2007, said Turbine 2013 would make the airline lean and would entail structural changes so that it could focus on core businesses. German news broadcaster n-tv said the airline planned to cut 10pc of the workforce, equating to more than 900 jobs.

Mehdorn said as of end-September Air Berlin had already drawn down $200m of the $255m five-year financing facilities the Arabian airline had provided last December for fleet development and was not currently in talks with Etihad for any new loans.

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