* Air Berlin examining business model
* CEO says too early to give details
* Expects 2014 rise in passenger numbers and revenue
(Recasts, adds CEO and trader comments)
FRANKFURT, May 15 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
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
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.
($1 = 0.7294 Euros)
(Reporting by Victoria Bryan; Editing by David Goodman)