Air Berlin needs further cost cuts for turnaround

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Air Berlin has introduced a second cost-cutting programme after it became clear that the ongoing capacity reduction scheme, dubbed 'Shape and Size', will not be sufficient to return the loss-making carrier to profitability.

The German airline has set up an additional programme, named 'Turbine 2013', which is to turn around the business in the short-term through "significant" cost cuts, it says.

No further details have been revealed, but Air Berlin says that Turbine 2013 will assess the company's "structures and processes", and be in place for a limited period of time.

The airline says that the measures under the Shape and Size programme, which was introduced in August 2011, have been working "better than expected" and will be continued. But further savings are needed, the airline adds, due to the "deteriorating economic climate, weak euro and increasingly uncertain consumer behaviour".

Air Berlin also blames high fuel prices and Germany's aviation tax for the need to slash costs further. It says it still expects to achieve a "positive result" in 2013 with the additional cuts.

The company adds that its newly-signed partnership with Air France-KLM, joining the Oneworld alliance earlier this year, and Etihad Airways' investment through a 30% shareholding last November, are central pillars which will "help Air Berlin exist against international competition in future".