Restructuring costs have pushed another member of Etihad Airway’s network of equity partners deeper into the red as debate continues about the future of Alitalia.
Italy’s government stepped in last week with a bridging loan of up to 400 million euros to keep the troubled Italian flag carrier afloat while a decision is made about whether to sell it as a going concern or liquidate it.
The Italian government has indicated it has no desire to renationalise the carrier and major investors have no appetite to put in more money after the airline’s workers rejected a restructuring deal that would have seen 1700 jobs cut and flight crew pay cut by 8 per cent.
At the same time, Germany's airberlin reported that net losses had widened from 446.6m euros in the 2015 financial year to 781.9m euros ($US852m) in 2016. The increase reflected 334.8m euros in restructuring costs but the airline also saw revenue drop as a result of a 4 per cent reduction in capacity and reduction in yield attributed to the threat of terrorism.
The news remained poor for the first quarter of 2017 as losses widened from 182.3m euros to 293.3m euros, this time without the impact of huge restructuring costs.
The airline said the first quarter was dominated by “the challenging structure of the old airberlin business model”.
“Other external factors have had a negative impact including a ground staff strike at Berlin Tegel Airport and operational limitations of the airline’s new ground service provider, which led to flight cancellations and reductions in capacity,’’ it said.
Airberlin announced the restructure in 2016 under former chief executive Stefan Pichler and new CEO Thomas Winkelmann said the airline had achieved “major progress” in three important areas.
The airline is concentrating its route networks on flights within Germany and to major European cities as well as long-haul destinations such as the USA.
It has reduced its fleet to 75 aircraft and cut its network from 387 destinations to less than 100.
Thirty-five of 38 aircraft being transferred to Lufthansa Group under a wet lease agreement have been moved so far.
Another 35 aircraft used to service certain leisure routes have also been transferred to Austrian low-cost carrier NIKI as part of plans to start a New European leisure carrier involving travel group TUI.
Airberlin announced in December that it planned to sell its 49.8 per cent stake in NIKI to Etihad.
A second stage of the plan is now pending regulatory approval of a joint venture between Etihad, NIKI and TUI.
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