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Tue 12 May 2015 09:50 AM

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Etihad-backed Air Berlin to continue revamp after weak start to Q2

CEO claims German carrier is on "a long road to recovery" after Q1 net loss of $178m, due to higher interest costs, hedging

Etihad-backed Air Berlin to continue revamp after weak start to Q2
Air Berlin (Getty Images)

German airline Air Berlin said on Monday it had to continue restructuring to cope with stiff competition and to return to profit because business remained weak.

Air Berlin's new chief executive Stefan Pichler is shaking up the carrier, in which Abu Dhabi's Etihad Airways holds a 29 percent stake, by cutting routes, implementing new revenue management systems and introducing a new fare structure.

"Because of increased market pressures and special expenditures, current foreseeable business development in the second quarter has so far not fulfilled expectations," the airline said when it reported first-quarter results.

"We understand that we need to continue the systematic re-engineering of our company in order to achieve the goals we have set and generate the necessary market momentum," Pichler said in a statement.

"We are at the beginning of a long road to recovery."

The airline's loss before interest and tax (EBIT) narrowed to 159.9 million euros ($178.6 million) in the first quarter through March from a loss of 182.8 million a year earlier.

But higher interest costs and changes in the market value of hedging instruments caused its first-quarter net loss to widen slightly to 210.1 million euros from 209.8 million, Germany's second largest airline after Lufthansa said.

Air Berlin is due to release full first-quarter results on May 12.

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