Airport Departure Tax killing traffic in Germany too
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Airport Departure Tax killing traffic in Germany too
Interesting to see Air Berlin announcements today. Consequences parallel with UK regional airport problems. Airport Departure tax is killing regional airport viability in the UK and Germany it seems. FF
Air Berlin to reduce fleet, slash routes in major shake-up
Kerry Reals, London
Air Berlin is to implement a wide-ranging cost reduction plan that will see it cut eight aircraft from its fleet, cancel a number of routes and partially withdraw from regional airports, in a bid to return to profitability.
The carrier will reduce its fleet by eight aircraft as it slashes capacity by more than 1 million seats in the second half of 2011. Air Berlin could not immediately be reached to comment on which type of aircraft will be included in the reduction.
Under the 'Shape and Size' programme, Air Berlin will axe flights from Frankfurt to Hamburg and Naples, from Stuttgart to St Petersburg, from Munich to Cairo and from Dusseldorf to Paris.
It is also dramatically cutting services from regional airports, which it said have become a "casualty" of the new German aviation tax. Flights from Munster/Osnabruck to London Stansted, Vienna and Sylt will be scrapped, as will flights from Cologne-Bonn to Valencia and various Moroccan destinations. Cologne to Innsbruck, Naples and Palermo will no longer be available in the winter months, nor will Hanover-London.
From November, there will be no direct winter flights from Karlsruhe, Dresden or Basel to Palma. Flights to London and Manchester from Paderborn will end, and air Berlin will completely end its presence at Erfurt.
"In order to become profitable, we need to make cuts in our flight routes and in our fleet," said Air Berlin chief executive Joachim Hunold.
Air Berlin saw its second-quarter operating loss widen to €32.2 million ($46.1 million). The carrier took a €20 million hit from the effects of civil unrest in North Africa, while it paid an extra €71 million for fuel in the second quarter. But it has saved its most scathing words for the new German aviation tax, which cost the carrier €45 million in the second quarter.
"The aviation tax is causing a dramatic distortion of competition. In relation to revenue, we have to pay almost four times as much as our largest competitor," said Hunold.
"The aviation tax, together with the existing competitive pressure, makes it impossible to pass on the increased kerosene price to the customers in its entirety. In order to prevent yet further damage to the already low-margin airline traffic in Germany, the aviation tax should be abolished as quickly as possible."
Hunold added that the planned cost reduction measures "will possibly not suffice to obtain a positive operating result at the end of the year".
Air Berlin to reduce fleet, slash routes in major shake-up
Kerry Reals, London
Air Berlin is to implement a wide-ranging cost reduction plan that will see it cut eight aircraft from its fleet, cancel a number of routes and partially withdraw from regional airports, in a bid to return to profitability.
The carrier will reduce its fleet by eight aircraft as it slashes capacity by more than 1 million seats in the second half of 2011. Air Berlin could not immediately be reached to comment on which type of aircraft will be included in the reduction.
Under the 'Shape and Size' programme, Air Berlin will axe flights from Frankfurt to Hamburg and Naples, from Stuttgart to St Petersburg, from Munich to Cairo and from Dusseldorf to Paris.
It is also dramatically cutting services from regional airports, which it said have become a "casualty" of the new German aviation tax. Flights from Munster/Osnabruck to London Stansted, Vienna and Sylt will be scrapped, as will flights from Cologne-Bonn to Valencia and various Moroccan destinations. Cologne to Innsbruck, Naples and Palermo will no longer be available in the winter months, nor will Hanover-London.
From November, there will be no direct winter flights from Karlsruhe, Dresden or Basel to Palma. Flights to London and Manchester from Paderborn will end, and air Berlin will completely end its presence at Erfurt.
"In order to become profitable, we need to make cuts in our flight routes and in our fleet," said Air Berlin chief executive Joachim Hunold.
Air Berlin saw its second-quarter operating loss widen to €32.2 million ($46.1 million). The carrier took a €20 million hit from the effects of civil unrest in North Africa, while it paid an extra €71 million for fuel in the second quarter. But it has saved its most scathing words for the new German aviation tax, which cost the carrier €45 million in the second quarter.
"The aviation tax is causing a dramatic distortion of competition. In relation to revenue, we have to pay almost four times as much as our largest competitor," said Hunold.
"The aviation tax, together with the existing competitive pressure, makes it impossible to pass on the increased kerosene price to the customers in its entirety. In order to prevent yet further damage to the already low-margin airline traffic in Germany, the aviation tax should be abolished as quickly as possible."
Hunold added that the planned cost reduction measures "will possibly not suffice to obtain a positive operating result at the end of the year".
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"The aviation tax is causing a dramatic distortion of competition. In relation to revenue, we have to pay almost four times as much as our largest competitor,"
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I think some airlines are using the tax's as an excuse to trim jobs and fleet size's and make themselves a leaner operation. Also trying to blackmail governments into getting things their own way.
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Not really about the tax, but Air Berlin itself in trouble...
While you can maybe make the argument that the tax has bad effects (well, Maastricht, Luxembourg and Eindhoven will argue they have bumper business !), the trouble of Air Berlin is Air Berlin itself ! Have you seen the latest news that their founder and CEO Joachim Hunold has stepped back ? This is _big_. It's a long long topic, but they never made money. For example LH seems to do fine, 'thank you very much'.
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Yes, it is about Air Berlin, however the tax as it was introduced does indeed distort competition as connecting pax have to pay it only once for the first part of the flight and cargo isn't taxed at all. Both does help Lufthansa a great deal and does not help Air Berlin at all, apart from extremely bad management decisions taken there in the past.
