Etihad-backed Air Berlin restructures for 'leaner, fitter future'

German carrier to split off leisure arm, loan planes to Lufthansa and focus on profitable routes
Etihad-backed Air Berlin restructures for 'leaner, fitter future'
By Ed Attwood
Wed 28 Sep 2016 11:52 PM

Air Berlin, in which Abu Dhabi’s Etihad has a 29 percent stake, has announced a major restructuring of its business that will see the German carrier focus on higher-yielding markets while splitting off its leisure operations into a separate unit.

From the middle of next year, the airline will operate a 75-strong fleet to serve profitable long-haul as well as short- to medium-haul flights, including to major business centres in Europe, from two main hubs in Berlin and Dusseldorf.  

The strategy will enable the carrier to add new long-haul routes and frequencies, particularly to the US, it said.

Air Berlin will also loan up to 40 of its A320 aircraft to Lufthansa, 38 of which will be wet-leased over a six year period.

“This far-reaching restructuring of our operations is about a new focus, giving us a new future,” said Air Berlin CEO Stefan Pichler, in a press statement.

“Now more than ever, we are faced with significant external market pressures which dictate a change to our current complicated business model.  airberlin has sought to serve all market segments with one operating platform, covering both business and leisure travellers.

“The core airberlin proposition in future is now clear:  a dedicated focused network carrier serving higher-yielding markets from two hubs in Dusseldorf and Berlin.

“A leaner, fitter, stronger airberlin has a bright future.”

The airline also said that 1,200 jobs would be made redundant as a result of the restructuring, and that compulsory and voluntary redundancies would be confirmed by February next year.

Air Berlin said that it would try and redeploy any staff who had lost their jobs across the Etihad Airways network of equity partner airlines, which include Alitalia, Jet Airways and Etihad itself.

Since acquiring the Air Berlin stake in 2012, Etihad has received more than $500 million in direct revenues as a result, the Abu Dhabi carrier said in a statement that also confirmed its support for the restructuring.

“In addition, the airberlin relationship is delivering a contribution of more than $630 million a year to the Abu Dhabi economy,” an Etihad spokesperson said.   

“However, airberlin has faced significant challenges in an increasingly competitive market, challenges which have become impossible to overcome with its existing structure.  The new strategy creates a lean, focused business which can compete effectively.”

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