Beleaguered airline Air Berlin is to cut its fleet by half and is all set to lay off 1,000 employees by the end of this year. The airline, which is in a tailspin caused by stiff competition, and the delayed opening of Berlin Brandenburg Airport, plans to reduce its fleet to about 70 aircraft and cut its workforce down to 7,600 employees.
According to the reports, Air Berlin’s biggest shareholder, Etihad Airways, was in talks with Lufthansa and travel company TUI over chopping up the dead weight and aircraft of the troubled airline. The reports paint a picture of a kind of mid-air rescue where TUI’s German airline TUIfly and Air Berlin’s Austrian subsidiary Niki might absorb unwanted parts of the business.
Lufthansa is all set to rent 40 planes and crew from Air Berlin in a sort of “wet lease,” where Lufthansa bears the economic risk, while Air Berlin gets payments. Insiders familiar with the deal say Etihad finally lost patience with the continual losses of Germany’s second biggest airline. The Abu Dhabi airline has been considering a complete sale of Air Berlin, but the air carrier is simply too big to sell off all at once, ergo the piecemeal solution we see taking shape is the next best solution.
Air Berlin Plc prices rose slightly on this news after a five-year long steady loss of altitude, closing yesterday at 0.73 euro cents, down almost 2 € from its 2011 high.
Air Berlin PLC & Co. Luftverkehrs KG, branded as airberlin or airberlin.com, is Germany’s second largest airline, after Lufthansa, and Europe’s ninth largest airline in terms of passengers carried.