Air Berlin joins Oneworld after announcing losses

Air Berlin joins Oneworld after announcing losses

Air Berlin joins the Oneworld alliance today days after announcing a €272 million (£227 million) annual loss.

Germany’s second-biggest carrier behind Lufthansa, Air Berlin reported a sharp rise in losses last Friday, with its operating deficit ballooning from just under €17 million (£14 million) in 2010 to €247 million (£206 million) last year.

The carrier reported a 1.2% rise in passenger numbers to more than 35 million and a 13.7% increase in turnover, and argued its decline in financial health had “bottomed out”.

Chief executive Hartmut Mehdorn said the carrier viewed the future “more positively” following “a poor 2011”. However, the losses would have been higher but for a €87 million tax benefit. Pre-tax losses rose by almost 250% on 2010 to €359 million (£299 million).

Air Berlin blamed a €229 million increase in its fuel bill and an additional €166 million paid out in German aviation tax, introduced in January 2011. Germany levies a tax on flights at a rate of €8, €25 or €45 depending on distance.

Mehdorn said: “Despite record figures for turnover and passenger numbers, we cannot be satisfied with the 2011 results.”

He added: “I am confident the German government will recognise how damaging the air traffic tax is to German aviation. It distorts competition, is environmentally nonsensical and puts jobs at risk.”

However, Mehdorn said: “Air Berlin is able to look to the future with optimism. Performance in all areas is improving. We have ridden out the bottoming out process.”

The airline announced a partnership with Abu Dhabi-based Etihad Airways in December, with the Middle East carrier taking a 29% stake in Air Berlin in return for $255 million (£162 million) in financing.

Mehdorn said both Oneworld and Etihad “offer attractive growth opportunities”. The carrier was already a code-share partner of Oneworld members British Airways, Iberia and American Airlines.

It is also undertaking a cost-cutting programme which it forecasts will save euro200 million this year. Air Berlin cut its flying from the UK last year, announcing its withdrawal from Manchester and pulling off four routes from London.


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