Air Berlin continues to float in their economic woes and German newspapers now report details about the massive restructuring that could see the airline halved in size very soon.
As per news reports, the airline is planning for 1,000 jobs to be cut in a first wave and aircraft being wet-leased to Lufthansa and TuiFly.
In the past few months there was plenty of speculation in regards to Air Berlin and their desolate financial situation that would sooner or later call for drastic action.
According to an article in the German daily Sueddeutsche Zeitung (access here), there are now more definitive plans that see imminent cuts in one thousand jobs, wetlease of aircraft to competitor Lufthansa, and leasing the 14 jets of Air Berlin subsidiary NikiFly to the holiday airline TUIfly.
The majority shareholder Etihad, which owns 29,2% of Air Berlin, is in negotiations with both Lufthansa and NikiFly. Results could be announced as early as this week the newspaper reports.
Air Berlin currently employs approximately 8,700 people (see company profile here) and plans to cut 1,000 jobs in the administrative sectors of various parts within the company. In addition to that, it plans to also shift the crews budgeted for the aircraft they plan to sell to the two carriers. When all is said and done, Air Berlin would pretty much be half in size of what it is today.
Sueddeutsche reports that in the last few years Etihad has pumped more than a Billion EUR into the German carrier to keep it afloat. Etihad has indeed been on a buying spree, purchasing parts of airlines all over the place, likely to secure valuable slots and channel traffic into their Abu Dhabi hub. Some (many) of these acquisitions became serious cash graves.
In the previous 3 years, Air Berlin has incurred losses of 1.2 Billion EUR and has only posted one single profit since going public in 2006.
Pressures that are lasting on the strikken carriers wings include the disaster around the still pending construction and opening of the Berlin-Brandenburg airport which has risen to a position of national shame for Germany.
Air Berlin’s problems are not only financial, but also operational. We get plenty of mail from our readers complaining about Air Berlin not responding properly to cases of missing baggage after they filed a Property Irregularity Report (PIR) at the airport. The airline doesn’t provide a point of contact or instructions for reimbursement in such cases. Customer Relations is often not replying to requests and passengers have to get the regulator, ombudsman or an attorney involved to claim legitimate expenses from Air Berlin.
All this adds to the bad reputation of the carrier which can be a decent alternative on some routes, especially within Europe. Bad press and bad experiences cost any company business though, and there are too many things going on. The bridge is burning on both ends, let’s hope Air Berlin is able to extinguish the fire before it’s too late.