April 28, 2014 / 11:41 AM / 4 years ago

UPDATE 1-Air Berlin to step up restructuring to return to profit

* Air Berlin posts 2013 net loss, finances deteriorate

* CEO says existing restructuring programme not sufficient

* Announces 450 mln euro recapitalisation

* Says Air Berlin to make “structural cuts”

* Shares down 4.7 percent (Recasts, adds CEO quote, share price)

FRANKFURT, April 28 (Reuters) - Air Berlin, the German airline partly owned by Etihad Airways, will have to step up restructuring and could cut more jobs as it struggles to return to profit, its chief executive said on Monday.

The finances of Air Berlin, Germany’s No.2 carrier after Lufthansa, have been deteriorating for several years as it struggled to halt losses and manage its debts following a period of rapid growth.

Late on Sunday, Air Berlin unveiled its fifth annual loss in six years and called on investors including Abu Dhabi-based Etihad to stump up more cash by buying bonds.

The recapitalisation will inject 450 million euros into its accounts by the end of 2014 and return Air Berlin to a positive equity ratio, which means its assets will exceed its debts again.

To fix its finances and return to profit in the long run, Air Berlin is cutting 900 jobs, or 10 percent of its workforce, and slashing unprofitable routes under its “Turbine” restructuring programme.

“But I have come to the conclusion that Turbine, as it is set up now, is simply not enough,” CEO Wolfgang Prock-Schauer told journalists during a conference call on Monday.

He said Air Berlin would make “structural cuts” and review its business model but declined to say what changes could be made or when a decision would be taken on the matter.

Etihad, which owns almost 30 percent of Air Berlin, on Monday called for an “accelerated and fundamental restructuring” of Air Berlin as it shelled out for a 300 million-euro convertible bond and extended a loan to the carrier by five years.

Air Berlin is also issuing additional new bonds with a volume of at least 150 million euros and making an exchange offer to bondholders with notes due in 2014 and 2015 .

Shares in Air Berlin, which have lost about 28 percent of their value over the past year, were down 4.7 percent at 1.671 euros by 1110 GMT.

$1 = 0.7227 Euros Reporting by Maria Sheahan; Editing by Thomas Atkins and Mark Potter

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