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Air Berlin remains in the red

The owner of FlyNiki, Austria’s leading low-cost carrier, has made a loss for a fourth year in a row.

Air Berlin chief Hartmut Mehdorn announced that his company sustained losses of 272 million Euros in 2011. Mehdorn explained that the airline’s debts rose to more than 800 million Euros but claimed: "Air Berlin is alive. We will be back in the black next year."

Mehdorn succeeded Air Berlin founder Rainer Hunold as CEO of the Berlin-based aviation company in 2011. The former Deutsche Bahn (DB) boss was initially expected to withdraw from the company again after a few months. Now Mehdorn is tipped to stay on board for another couple of years. His standing was strengthened when it emerged that prospering United Arab Emirates (UAE) flag carrier Etihad Airways increased its share in the German budget carrier from three to 29.2 per cent.

Air Berlin raked in large sums for a few years during its quick expansion across Europe before plunging deep into the red. It started cooperating with FlyNiki in 2004. Air Berlin acquired the Viennese budget airline in full last year. Niki Lauda, who founded Lauda Air and FlyNiki, announced his resignation as FlyNiki CEO on the same day. He is currently part of Air Berlin’s administrative board.

Air Berlin, which has more than 9,000 employees, promises not to increase ticket prices in the foreseeable future. Mehdorn explained that only an explosion of kerosene prices could force his airline to jack up its ticket prices. He said the airline – which had 35 million passengers in 2011 – would sell some planes and cut back its administrative costs in the coming months.

Meanwhile, Swiss will soon charge more for tickets. The Basel-based airline, which is part of the German Lufthansa Group, announced on Sunday that tickets for its European services would soon cost around 12 to 17 Euros more. Swiss has developed one of Lufthansa’s most powerful assets. The company managed to increase its passenger figures in the past years.

Austrian Airlines (AUA) registered more passengers in 2011 than in 2010 as well. However, its losses failed to decline significantly at the same time. The airline, which was rescued from ruin by Lufthansa in 2009, counted 11.26 million customers last year, 3.4 per cent more than in 2010.

New AUA CEO Jaan Albrecht said on Saturday he was convinced that AUA would not be sold by Lufthansa despite its weak economic condition. Albrecht told radio Ö1 he believed in the airline’s future "because I am a positive person". The AUA executive board boss warned that there was no alternative to stop the 600 AUA pilots’ salaries from increasing automatically every two years. He once more appealed to works council chiefs to agree with his team of negotiators’ plans soon.

Lufthansa chief Christoph Franz announced on Thursday that AUA would soon receive 140 million Euros but also warned that the money would only be transferred if the AUA board managed to keep lowering operating costs. Lufthansa managers want Albrecht to reduce AUA’s expenditure by 220 million Euros in 2012.

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Tag cloud:
Lauda  ndash  Berlin  FlyNiki  prices  cooperating  Europe  administrative  rsquo  Euros  passengers  carrier  airline  Lufthansa  Swiss  ticket  Albrecht  based  Mehdorn  German

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