Etihad has agreed to loan the German carrier up to US$255m; loss widens to US$81.8m
German carrier airberlin, partly owned by Gulf airline Etihad, said on Wednesday that its second-quarter loss widened due to soaring fuel costs, the euro's weakening against the US dollar and a German air travel tax.
In the three months through June, Germany's second-biggest airline after Lufthansa posted a net loss of €66.2m (US$81.8m), compared with a year-earlier loss of €43.9m.
The Berlin-based carrier, which has not posted an annual operating profit since 2007, is trying to shrink its way back to profitability after growing rapidly and racking up debt.
It is therefore cutting both seats as well as unprofitable routes and has postponed plane orders in a bid to reduce operating costs by about €200m this year.
Second-quarter revenue rose 1.7 percent to €1.14bn as airberlin raised ticket prices.
But the carrier's equity plummeted by about two-thirds to €101.3m by the end of June, while its net debt grew by 32 percent to €811.9m.
The equity reduction was partly due to seasonal effects and valuation of hedging instruments, airberlin said, adding that the figure had improved by €60m by the end of July.
To further bolster its liquidity, airberlin also got a €162.9m loan from Etihad on June 30.
Under the initial agreement struck when Etihad bought almost a third of Air Berlin in December, the Abu Dhabi-based airline agreed to grant airberlin up to US$255m. In May airberlin said it had drawn in the first quarter close to €90m under the credit facility agreed with Etihad.
A spokesman for Air Berlin declined to provide details on the loan facility received on June 30 before the carrier publishes full quarterly results and holds a conference call on August 15.For all the latest transport 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.