Europe’s airberlin reveals plan to restructure business

Airberlin, the European carrier in which Abu Dhabi’s Etihad Airways has a 29.2% stake, has unveiled a far-reaching restructuring of its business, which will see the company concentrate its core operations as a dedicated, focused network carrier serving higher-yielding markets, from its two key hubs in Berlin and Dusseldorf, with a core fleet of 75 aircraft.

Etihad has an equity stake in airberlin
Etihad has an equity stake in airberlin

Its leisure flying will be combined into an independently operating business unit.

To employ excess aircraft and crew capacity, airberlin intends to provide up to 40 Airbus A320 family aircraft to the Lufthansa Group with up to 38 aircraft to be wet-leased under a six year wet-lease agreement.

The restructuring follows a comprehensive, bottom-up review of all operations, seeking to improve efficiency, limit seasonality and re-establish a clear market proposition for the airline.

airberlin’s core operations will be served by a fleet of 75 aircraft from summer 2017, consisting of 17 A330 wide body aircraft for long-haul flights, 40 A320 family aircraft and 18 Q400 aircraft for short-/medium-haul flights including to major business centres throughout Europe.

Fewer staff will be required, with up to 1,200 positions becoming redundant. The company will enter discussions with works councils’ representatives with an aim to confirm voluntary and compulsory redundancies by February 2017.

Stefan Pichler, airberlin’s CEO, said: “This far-reaching restructuring of our operations is about a new focus, giving us a new future.

“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.”

airberlin’s touristic flying operations will be operated in a separate touristic-focused business unit, as strategic options are evaluated.

Pichler added: “Our leisure business has great underlying value which will be stronger in a separate touristic-focused business unit.

“In turn, this allows airberlin to focus on its core operation as a network scheduled airline.”

With the announcement of the new strategy, airberlin also announced that it intends to provide up to 40 A320 aircraft to the Deutsche Lufthansa Group, with up to 38 aircraft to be operated under a six year wet lease agreement or ACMIO arrangement, which includes aircraft, crew, maintenance, insurance and overhead services. This arrangement allows airberlin to reduce excess capacity while reducing restructuring costs. The wet lease is to be fully operational by the 2017 summer season.

Going forward, airberlin’s profitable long-haul programme will be expanded with new routes and additional frequencies, particularly to the United States.

The airline’s short- and medium-haul programme will concentrate on year-round business markets with a strong focus on Italy, Scandinavia and Eastern Europe. It will also aim to build a higher share of domestic business travel.

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