Air Berlin has said it would be able to secure its survival without further help from partner Etihad Airways, even after it posted a larger-than-expected loss in the first quarter.
"Our goal is very clear. We have to secure our survival from our own internal strength," chief executive Wolfgang Prock-Schauer told reporters on Wednesday.
Germany's second-biggest carrier, almost 30 percent-owned by Etihad, suffered a first-quarter loss before interest and tax (EBIT) of 188.4 million euros ($244.5m), causing its shareholders' equity to turn negative - meaning its liabilities exceeded its assets.
Air Berlin's finances have been deteriorating for several years as it struggled to halt losses and manage its debts following a period of aggressive growth.
Some analysts have had a close eye on the size of its equity compared with its debt as a key indicator of financial health.
The group's shareholders' equity was minus 53.1 million euros at the end of March, against a positive 130.2 million at the end of last year.
Air Berlin blamed a traditionally weak first quarter and restructuring costs for the drop in equity and said it expected the measure to turn positive by the end of this year.
The airline said it would not need more help from Abu Dhabi-based Etihad, which bought its stake in Air Berlin via a share issue in 2011 and then granted it a $255m loan.
Last year, Air Berlin posted its first annual operating profit since 2007, after cutting seats and unprofitable routes and selling its frequent-flyer programme to Etihad.
Earlier this year it also launched a restructuring programme called Turbine 2013, under which it is reducing its staff numbers by 10 percent to help save 450 million euros by the end of 2014.
It said on Wednesday it had already achieved two thirds of the 200 million euro earnings contributions from Turbine it had targeted for the year and affirmed its 2013 EBIT breakeven goal.
It also said its liquidity, which rose to 470 million euros at the end of March from 328 million at the end of 2012 thanks to a bond issue, would be sufficient to finance its operations, implement Turbine and make investments until next year.
"They're still in a stressful situation, but the liquidity is so high. The situation will improve rather quickly in the next few months," analyst Juergen Pieper at brokerage Metzler Equities said. "With Etihad as a strong partner, I think the situation there is under control."For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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