Air Berlin to stick with business model despite troubles

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German budget carrier Air Berlin, which is in the throes of a major cost reduction programme, believes its general business strategy is correct but says it is seeking to conduct its operations more efficiently.

The carrier, which is cutting 18 aircraft from its fleet as part of its 'Shape and Size' productivity programme, said that more than 30 work groups throughout the airline were identifying targets to improve processes and optimise aspects of the company's organisation.

The programme aims to save €200 million ($274 million), partly through a reduction of 18 aircraft from the fleet by summer 2012.

This 10% reduction in fleet size to 152 aircraft would see productivity of each of the remaining aircraft increase by approximately 200h a year, said the carrier.

Interim chief executive Hartmut Mehdorn said that intensive scrutiny of the airline's corporate strategy had not revealed any grounds for changing its business model. It will continue to focus on its four hubs at Berlin, Dusseldorf, Vienna and Palma de Mallorca and on joining the Oneworld alliance as a full member in spring 2012.

"We are currently operating in a turbulent environment, both in terms of competition and economic conditions," said Mehdorn. "In order to secure the company's future for the long term and to restore Air Berlin's strength, every single company division will be scrutinised over the coming months.

"However, we will not economise with respect to our clients, our service and our safety."