Air Berlin keeps capital increase options open

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Air Berlin is considering a potential capital increase once it returns to profitability as it continues its restructuring efforts.

Chief executive Wolfgang Prock-Schauer did not rule out a future capital increase during the German airline's half-year results presentation today. But such a cash injection would only be conducted if the loss-making carrier has returned to profitability, he says. Air Berlin has just posted a net loss of €38 million ($50 million) for the second quarter, cutting losses by around two-thirds on the same period last year.

The airline says its cost-cutting and revenue improvement programme "Turbine" is on target to save €200 million this year. Another €200 million is due to follow under the two-year initiative by the end of 2014. But the company adds that further measures - beyond the turnaround scheme - will be necessary due to the economic climate and growing competition.

German trade union Verdi told Flightglobal Pro earlier this year that internal Air Berlin documents showed a savings target of €450 million. But the airline insists the target remains unchanged at €400 million.

Air Berlin plans to slash 900 jobs as part of the "Turbine" programme. A third of the respective positions have been cut by the end of July.

The carrier says it is planning to sell 13 aircraft to boost its balance sheet. Some 11 Airbus A320s and Boeing 737s have now been placed with Chinese lessor Minsheng Commercial Aviation, a newly founded subsidiary of Minsheng Financial Leasing.

The preliminary deal covers the sale and lease-back of seven aircraft - six A320s and a 737 - as well as the sale of four 737s for placement on the Chinese market.

The aircraft which will remain in Air Berlin's fleet comprise five used A320s, a new, sharklet-equipped A320 and new 737-800. The latter two are to be delivered in 2014.

Air Berlin says the sale of the 13 selected aircraft does not mean a further reduction in size fleet beyond the target of operating 143 aircraft by the end of 2013.