airberlin announces new turnaround measures
 

Is this normal when the market is picking-up?

airberlin announces new turnaround measures

Yeah, but I mean... is it normal that they are making a loss precisely when the market is on the rise?

In any case, I wish all the best for them.

The market isn't exactly picking up in germany to be honest, lufthansa has to start a huge restructuring program as well after results were less than stellar. Although they didn't post losses to be honest.

Wps seemed nice while at bmi but didn't manage to turn the company around. Let's see if he can deliver here.

They seem to have a good product. Okay seats, some charme and not pure no thrills atmosphere. Fleet is young and reliable, airplanes look not empty they have many company travel contracts. Prices are mid level, they don't give away seats for free. There must be some income.
I don't get where their losses come from?

Lack of focus and identity - just what are they? A business airline, a low cost airline, a network carrier? I doubt even Air Berlin know. Then you have several different airlines working together to make up Air Berlin. A very diverse fleet with all the costs associated with it. They're BMI all over again.

They give off the low cost vibe but en they give you free onboard catering. You have the old LTU routes and new AB long haul routes too. It's just a miss match of a little but of everything chucked under the one brand. This isn't working. Focus is key in the industry. Just look at Monarch, look what happened to BMI and also look stateside to Frontier.

They seem to have a very mixed fleet too which is not good for maintenance costs. They remind me of ansett Australia who had every type of aircraft imaginable in their fleet and look what happened to them.

Their fleet comprises of Boeing and Airbus. Plenty other companies with that mix. As for having several variants within the generic type, that doesn't add so much more to the overall operating costs. It does however give much more flexibility. I just hope they don't go the RYR direction regarding their service product. I fly BER and I hope they won't deviate too much from their current product. I think that their main problem lies in their fragmented route network and bases. This is obviously what they intend to address.

If you look to the success stories they operate one type. Ryanair, Germanwings, Vueling, Wizzair and easyJet. Monarch are switching to a single type. Whilst I appreciate variants of one type may be a good thing when you have variants of two types, plus the a330 and the Dash8 thrown it, it is not going to be as efficient, not by a long shot. I wouldn't be surprised if the Boeings go, the a330 leaves the fleet and they become an all a32X operator.

Germanwings currently operates CRJs as well, easyjet operated for a large part of their history two types as well. The 737 is already on its way out (down to around 30 from 60) and will probably leave the company within the next two years.

I very much doubt they will let go all the A330s and abandon all Long Haul routes. Some of them are good earners. The Dash-8s are operated by subsiduary LGW, which has a much lower cost base.

The growth and forward order book of LOCO's is all part of this.
They get it on all fronts, proliferation of LOCO operations depressing fares, chasing business travellers , and the rest LH and it's focus on German Wings.

Legacy practices and often loco fares ...

Miss match of fleet . Much streamlining to do ..

Starting february 1st 2015 Mr. Stefan Pichler will head AB as their new CEO.

Easyjet operated 2 types because of legacy and acquisition rather than a conscious decision to do so, in moving to an Airbus fleet the old fleet would over time move out, the acquisitions of Go and GB Aiways also gave them fleet issues. These were resolved quickly.

Air Berlin has not shown to have the same focus in doing this............. just means different engineers, different pilots and different sets of spares and parts.

Rather unintentionally hilarious press release from his current employer Fiji Airways:

:ooh:

Good find

Bet that was seen humourously by Luftansa's management.
Germans always known for a good sense of humour.

Easyjet dual fleet was, for several years, a conscious effort and not the result of an overlap between airbus introduction and Boeing withdrawal.

The latest results in what should be the strongest time of the year are not encouraging. Turnover slightly down, not much sign yet of any bottom line effect from the Turbine improvement project, more a sense of deckchairs being rearranged on the Titanic. This perhaps explains the change of senior management.

It would be interesting to know how they are hedged given the current drop in fuel price. That seems about the only obvious upside.

The question as to whether Etihad's involvement is in line with EU regulations also seems unresolved. Although to be fair if Etihad were classed as a multinational bank rather than an airline (which is the way they seem to be behaving, continually extending loans to keep Air Berlin afloat) then things might be simpler.

Interesting times are ahead. If Hogan pulls it off it will be the stuff of legend.

Typically the people lending money to a company and people who own the shares as a long term investment have very different interests. What is good for the lender is sometimes very different to what the share investor wants to see. It can sometimes be a bad idea if these 2 perspectives get confused.

In many countries, there are strict laws that prohibit a bank from both providing large loans and also owning a significant proportion of the shares of a company. The aim is to try to prevent a conflict of interest.

The cynical definition of a long term investment is a short term speculation that went wrong! But in any case I do not think anyone is likely to mistake the Arab airline for a bank...whatever their motives.