Tuesday, August 27, 2013

Etihad’s support for Air Berlin conditional on restructuring


August 23, 2013

Abu Dhabi: Etihad Airways will continue to support Air Berlin, as long as the loss-making lower-cost carrier continues to make progress with its restructuring programme.

Etihad’s Chief Commercial Officer Peter Baumgartner said late on Thursday that the UAE airline is interested in a long-term collaboration between the two carriers and has confidence in Air Berlin’s turnaround programme.

He didn’t say, however, whether Etihad would provide further financial support.

Etihad Airways is Air Berlin’s largest shareholder, with a stake of over 29 per cent, and has in the past helped to keep the carrier aloft. In February, it subscribed to 29.2 per cent of an Air Berlin convertible bond. In December, Etihad bought more than 70 per cent of Air Berlin’s frequent flier programme for 184.4 million euros ($246 million).

Air Berlin’s second-quarter performance has shown some improvement, with its net loss narrowing to 38 million euros from 99.8 million euros a year earlier. However, the airline also admitted it would difficult to achieve an operating profit this year and last week said it can’t rule out a capital increase.
It plans cost savings of at least 200 million euros this year in order to bring its net debt to 500 million euros by the end of the year from 706.5 million euros as of June 30.

“When we got involved with Air Berlin, it was clear that the management is facing a big and difficult task with its austerity program and the planned turnaround,” Baumgartner told reporters in Hamburg.

Etihad doesn’t seem concerned, however, even if it takes longer than planned for the lower-cost carrier to break even.

“As long as it’s going in the right direction and milestones are achieved within certain tolerance limits, we won’t panic or become nervous,” Baumgartner said, without giving details on what milestones he considered most important.

No comments:

Post a Comment