Air Berlin blames restructuring costs for deeper losses

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Restructuring costs were the primary reason for Air Berlin's deeper losses during the first quarter of 2013, but the German carrier says that its 'Turbine' turnaround programme will make a positive impact in the second half of the year and lead to a full-year break-even result.

Revenues at the German carrier fell 2.6% to just under €792 million ($1.02 billion), while earnings before interest and tax (EBIT) dropped 26% to a €188 million operational loss compared with the first three months in 2012.

The net loss fell nearly a fifth to a €196 million.

The airline says, however, that if this year's EBIT was adjusted for one-off charges for the Turbine programme - and last year's figure was adjusted for one-time positive effects due to the sale of assets - the operational losses during the first quarter would be similar at €171 million in 2013, and €173 million in the previous year.

Air Berlin's operational spending increased 0.2% to €988 million in spite of lower material costs - mainly fuel and airport charges - due to the carrier's significant capacity cuts since last year. This was the result of one-off "effects" of around €25 million mainly due to the Turbine programme, says Air Berlin.

The airline adds that it deliberately placed these costs in the traditionally weak first quarter, and that the Turbine scheme should make a positive impact on its results from the third quarter, after the busier holiday season.

The company says it is "on track" to save around €200 million through Turbine in 2013. The programme is aimed at saving €450 million by the end of 2014.

Air Berlin's total equity fell from around €130 million at the end of 2012 to a deficit of €53.1 million at the end of March. This was a result of the restructuring costs, slow seasonal business and "other" one-off costs.

But the airline says that the cash deficit will have no impact on its continued operation, further restructuring measures and "necessary" investments. The management adds that it sees "no need to re-evaluate any of its shareholdings".