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Aviation

Air Berlin plans huge recapitalization to turn the corner

Germany's second-largest carrier, Air Berlin, has finally revealed its 2013 earnings figures after a series of delays. The company has been seeking a way out of a current crisis, and recapitalization is the buzzword now.

Air Berlin said Monday it was deeply in the red in 2013, with its annual earnings report revealing a net loss of 315.5 million euros ($436.1 million). A year earlier, the German carrier still booked a bottom-line profit of 6.8 million euros.

2013 revenues dipped to 4.15 billion euros, down from 4.31 billion euros in 2012. The negative figures came despite the airline's continuous efforts to cut expenditures through its "Turbine" savings program.

Air Berlin announced the scheme was expected to save another 200 million euros by the end of this year, with the carrier also cutting about 900 jobs, about a tenth of the total workforce.

Convertible bonds to do the trick

What lies ahead for Air Berlin?

Air Berlin said it abandoned more routes last year for profitability reasons, and that its fleet was reduced by another 15 aircraft to total 140. According to the airline's latest report, the carrier's occupancy rate rose by 5 percent in 2013 to 84.8 percent.

The struggling company maintained it had met the prerequisites for an urgently needed recapitalization. Abu Dhabi's Etihad was expected to help out with a convertible bond to the tune of 300 million euros to be paid out in three tranches.

Air Berlin itself would also raise another 150 million euros in a bond issue of its own, said CEO Wolfgang Prock-Schauer.

hg / kpc (dpa, AFP)

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