Etihad-backed airberlin to sell eight planes
Loss-making carrier airberlin is to sell eight planes to improve its deteriorating finances and help cut €300m (US$370m) debt by the year-end.
"The sale is expected to result in a profit. Both the equity ratio and the liquidity position will noticeably benefit from the transaction," Germany's second-biggest airline after Lufthansa said on Wednesday.
The carrier, which has not posted a full-year operating profit since 2007, has already cut seats, unprofitable routes and postponed plane orders to reduce operating costs and shrink its way to profitability after racking up debt to grow rapidly.
Despite that, net debt barely changed in the first half, standing at €812m at end-June. Loans from Abu Dhabi-based carrier Etihad Airways, which last year bought a 29 per cent stake accounted for about €163m of the debt.
airberlin shrank its fleet to 152 aircraft by end-June from 165 a year earlier. According to its website, it owns 26 of its aircraft with the rest leased.
Last week, it reported a wider second-quarter net loss of €66.2m and said shareholder equity had plummeted about two thirds to €101m by the end of June.
It aims to improve earnings strongly in 2012, helped by €230m savings from a cost-cutting programme.
The equity ratio - a measure of shareholder equity compared with the overall balance sheet - should be higher at the end of 2012 than the end of last year.
DZ Bank analyst Robert Czerwensky said the plan to improve the equity ratio made sense, adding the stock remained a "sell" based on its weak financial profile.
Air Berlin's stock has lost almost a quarter of its value this year amid concern over its finances. Of 11 analysts covering airberlin, according to Reuters data, 10 have a "sell" or "strong sell" recommendation.
Its shares were down 0.2 per cent to 1.9250 euros by 0830 GMT.
Adding to airberlin's woes, passenger numbers fell 5.9 per cent in the busy summer travel month of July, as demand fell faster than it could cut capacity.
It has also been hampered by the delayed opening of Berlin's new airport, which should replace the Schoenefeld and Tegel airports that date from the Cold War.