Etihad-backed Airberlin to shed 1,200 jobs

Loss-making German carrier airberlin is to axe 1,200 jobs and provide Lufthansa Group with 38 A320s under a six-year wet lease agreement as part of wide-ranging restructuring plans.

Airberlin’s core operations will be served by a fleet of 75 aircraft from next summer, comprising 17 A330s for long-haul flights, 40 A320s and 18 Q400s for short-/medium-haul flights including to major business centres throughout Europe.

Up to 1,200 positions will go and the company will enter discussions with works councils’ representatives with an aim to confirm voluntary and compulsory redundancies by February 2017, some of whom will be redeployed within the Etihad Airways Partners group of airlines (Etihad owns a 29.2 per cent stake in airberlin).

In a statement, Etihad said it supported the strategy and outlined the “strong returns” it had seen from its investment.

“We have already received more than $500m in direct revenues to Etihad Airways and airberlin today delivers more than $150m a year in direct revenues, as well as wide-ranging cost synergies which have already reached more than $100m,” an airline spokesperson said.

“However, airberlin has faced significant challenges in an increasingly competitive market, challenges which have become impossible to overcome with its existing structure. The new strategy creates a lean, focused business which can compete effectively. We remain committed to the restructuring of that business as it moves forward.”

Stefan Pichler, airberlin’s CEO, said it continues to grapple with “significant external market pressures” which dictate a change to its current “complicated” business model in which the airline 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,” he said.

Airberlin will box off its leisure operations in a separate unit while Lufthansa Group, keen to grow its Eurowings low-cost subsidiary, will use the new narrow-bodies to expand in Europe.