January 7, 2013 / 9:47 AM / 5 years ago

UPDATE 1-Air Berlin CEO steps down

* Hartmut Mehdorn steps down, effective immediately

* Strategy officer Wolfgang Prock-Schauer to take over

* Comes as Berlin airport opening seen delayed further

* Air Berlin shares down 2.8 pct

FRANKFURT, Jan 7 (Reuters) - Air Berlin’s chief executive stepped down on Monday, handing over the task of bringing Germany’s second largest airline back into profit to strategy chief Wolfgang Prock-Schauer.

Hartmut Mehdorn, who has served as CEO on an interim basis since September 2011, put the loss-making group on a strict cost-cutting path and brought Etihad on board as a major investor, with the Gulf airline taking a 29.12 percent stake in Air Berlin.

Air Berlin has not made an operating profit since 2007, after a hasty expansion drive led to heavy debts.

Under Mehdorn, the former head of Germany’s railway company, it has been cutting routes and seats, and postponing plane orders. It has also agreed to sell its frequent flyer programme to Abu Dhabi-based Etihad.

Adding to the airline’s woes are reports on Monday that the opening of Berlin’s new airport will be delayed again to at least 2014, since Air Berlin plans to use the new airport as a hub for more profitable intercontinental flights.

Shares in Air Berlin were down 2.8 percent at 1.51 euros at 0906 GMT.

“Air Berlin is facing huge challenges,” Prock-Schauer said in a statement on Monday. “We must continue to push our process of change forward rapidly to become lean and smart.”

Prock-Schauer has until now held the post of chief strategy and planning officer at Air Berlin. He previously held the CEO positions at India’s Jet Airways and later British Midland International (BMI).

Lufthansa sold BMI to British Airways owner IAG in 2012.

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