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FRANKFURT: Air Berlin said it is looking at all options, including its business model, as it prepares to launch a fundamental restructuring aimed at restoring the loss-making airline to profitability.
"Work is in full swing on all elements of our restructuring programme," Chief Executive Wolfgang Prock-Schauer told analysts on Thursday after the group reported first-quarter results and said it needed "fundamental change" to ensure long-term profitability.
The German airline, in which Gulf carrier Etihad owns a 29.2 percent stake, has reported annual losses for five out of the past six years after fast expansion left it saddled with debt.
It had already announced plans to cut costs and 10 percent of its workforce under its Turbine restructuring programme, but after asking shareholders last month for more funds it said the programme was not enough and has called on consultants to help it to develop new, deeper measures.
"We have assembled an additional package of measures and will define a strategic realignment," Prock-Schauer wrote in Thursday's quarterly report.
Analysts have long called for Air Berlin to rethink its business model, a mix of charter routes to holiday destinations such as Majorca, plus short-haul point-to-point traffic and some long-haul routes.
Late on Wednesday it reported first-quarter results showing a slightly narrower operating loss of 182.8 million euros ($250.6 million), revenue down 3.8 percent, net debt of 800 million euros and negative equity - where debts exceed its assets - of 399 million euros.
"No improvement and negative equity of about 400 million euros.
Where is the viable business model?" one Frankfurt-based trader asked on Thursday.
Etihad, which has provided Air Berlin with a shareholder loan, bought a majority stake in its frequent-flyer programme and last month subscribed to 300 million euros of perpetual convertible bonds, has also called for an "accelerated and fundamental restructuring" of Air Berlin.
Prock-Schauer said on Thursday that it is too early to give details of how the restructuring could look but added that Air Berlin is moving away from a phase of capacity cuts and expects growth in passenger numbers and revenue this year.
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