• Net result of EUR 6.8 million, 33.3 million guests
• Group revenue of EUR 4.31 billion, capacity utilization and yield increased
• Strategic partnership with Etihad Airways provides joint revenue of EUR 100 million, new code share routes expected to provide further growth
• First “Turbine” measures started – EUR 400 million until the end of 2014
• 180 positions already cut between January and the end of March 2013
• As of summer 2013, the Berlin and Dusseldorf hubs will be strengthened with increased flight frequencies and new destinations
• Revenue growth with fewer routes and increased frequencies: routes will be reduced from 523 in summer 2012 to 438 in summer 2013.
• Fleet reduction by twelve aircraft to 143 aircraft by the end of 2013
• The goal for 2013 is operational profitability, break-even at the EBIT level

Over the first months of the year, airberlin, Germany’s second-largest airline, implemented numerous measures of the “Turbine” turnaround program. At today’s press conference on the 2012 results, airberlin’s CEO Wolfgang Prock-Schauer stated: “With Turbine, we are setting up airberlin in line with the market. We are becoming leaner, faster and are, at the same time, continuously improving our service and flight offers. In the first months of 2013, we have initiated a number of measures. It goes without saying that such programs have a start-up phase and start-up costs. We will reach ‘cruising altitude’ by the end of 2014.”

This two-year program will enable Germany’s second-largest airline to further expand its presence in core markets and to make structural changes aimed at making the company sustainably fit for the future. For that purpose, airberlin will further promote its integrated business model through which the company caters to tourist travelers and business clients. Up to the end of 2014, the Turbine program includes initiatives of approximately EUR 400 million, so as to achieve a sustainably competitive profit situation.

Turbine program with multiple measures started

The turnaround program comprises in particular the areas network and fleet, sales & distribution, products and services as well as operations. The first Turbine measures have already been implemented in this year’s summer flight schedule. The optimized offer strengthens airberlin’s presence in Europe and further expands the long-haul connections to North America. airberlin is carrying out the network optimization by using the principle of increasing frequencies on economically profitable routes. The target is a robust network that is less susceptible to seasonal fluctuations and provides for more productive aircraft and personnel. As a result the airline is strengthening its long-haul hubs Berlin and Dusseldorf with additional long-haul frequencies and improved flight connections. These will increase in Berlin from ca. 7,600 to ca. 11,000, and in Dusseldorf from ca. 3,000 to ca. 4,050. At both airports, the number of weekly flight frequencies will grow by a total of 61 additional connections as compared to the previous year. At the same time airberlin has reduced economically unprofitable routes, with the number of routes decreasing from 523 to 438 on an annual comparison. With the optimized flight schedule, the fleet will be reduced from 155 aircraft at the end of 2012, to 143 aircraft at the end of 2013.

Network and station optimization will result in increased crew productivity. In the future, comprehensive aircraft maintenance (Base Maintenance) will only be carried out in Munich.

In connection with the restructuring cost reductions in personnel are necessary. Between January and the end of March 2013, 180 jobs will have been eliminated.

Airberlin is expanding its service in line with passenger requirements. From mid-year onwards, a modular catering concept will be introduced on the short and medium-haul flights. This will provide passengers with services commensurate with the duration of the flight. An example is the new Business Class seats introduced on long-haul flights.

Net profit for 2012

Airberlin concluded the 2012 business year with a return to profitability. The operating profit before interest and taxes (EBIT) of EUR 70.2 million was a significant improvement over the previous year results. The company’s net income of EUR 6.8 million marks a return to profitability and follows a loss of reported EUR 271.8 (restated: -420.4 million) in the 2011 business year.

In the past year, Airberlin increased its group revenue to EUR 4.31 billion (2011: EUR 4.23 billion). While the number of passengers decreased by 5.5 per cent to 33.3 million (previous year: 35.3 million), capacity utilisation increased by 1.6 percentage points to 79.80 per cent (previous year: 78.21 per cent). This was achieved by a further fleet reduction of 15 aircraft to 155 aircraft and improvements of the flight schedule. Yield (revenue per passenger) improved by 7.7 percent to EUR 120.05 (previous year: EUR 111.43).

The spin-off of the frequent-flyer program “topbonus”, the implementation of the efficiency program “Shape & Size” and the increasing synergy effects resulting from the strategic partnership with Etihad Airways have contributed to the positive development of the operating result. In this context, Shape & Size has contributed EUR 250 million.

“The profit of the past financial year and the successful placement of the convertible bond enabled us to further stabilize the financial basis of the company. The favorable conditions, the swift placement and over-subscription of the bond demonstrate the market’s confidence in our company,” stated airberlin’s Chief Financial Officer, Ulf Hüttmeyer. The goal for 2013 is a break-even at the EBIT level and therefore operational profitability.

The strategic partnership with Etihad Airways, which started at the beginning of 2012, has already shown positive effects within less than 12 months. By the end of 2012, codeshare routes enabled the two airlines to generate together a revenue increase of EUR 100 million. airberlin and Etihad Airways have already concluded almost 100 agreements with companies and sales partners and through synergies have further increased revenue and reduced operating costs. By further expanding codeshare routes with other Etihad Airways partners, airberlin will be able in the future to offer more destinations and increase revenue generated by codesharing. Furthermore, the strategic partnership is increasingly reducing costs for both airlines. For example, in the areas of procurement, maintenance, training and product harmonization, the two airlines are increasingly making use of their synergy potentials and expect these to reach their full potential in the coming years.

Global network established

Wolfgang Prock-Schauer assesses the advantages of the strategic partnership with Etihad Airways: “Our cooperation with Etihad Airways exceeds all our expectations.” This cooperation enabled Airberlin to set up a global route network in the course of the past year. Within one year, Etihad Airways and Airberlin have increased the number of codeshare routes to 90 connections and are flying to a combined 239 destinations in 77 countries. In 2012 alone, more than 320,000 passengers used the common flight network.

Airberlin’s membership in the global airline alliance, oneworld_^®, which started in March 2012, is also positive. The number of passengers traveling on these codeshare routes increased to 310,000 passengers.

Airberlin CEO Wolfgang Prock-Schauer added: “Our optimized route network together with the global network of our partners will enable us to be sustainably successful in the future. For that purpose, we need a functional hub in Berlin and the new airport BER that adheres to the operating times as foreseen in the official planning.”

Copyright Photo: Andi Hiltl. The Niki name is being kept alive at the Austrian subsidiary of Airberlin while assuming the brand colors of the parent. Niki-The Spirit of Niki (flyniki.com) Airbus A320-214 OE-LEX (msn 2867) arrives at Zurich.

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