Air Berlin

Air Berlin PLC & Co. Luftverkehrs KG (FSE: AB1) is Germany's second largest airline after Lufthansa.^[1] It is based in Berlin, Germany, and operates extensive semi-low-cost services to holiday destinations on the Mediterranean, the Canary Islands and North Africa, as well as to major cities in Europe from 20 German airports. Its main base is Düsseldorf International Airport, with hubs at Berlin-Tegel International Airport, Nuremberg Airport and Son Sant Joan Airport, Palma^[1].

Air Berlin is publicly traded (ticker symbol is AB1, ISIN is GB00B128C026)^[2] It has 8,400 employees (at March 2008).^[1] The airline carried over 28.2 million passengers in 2007.

History

gathered fleet at Berlin-Tegel Airport

Air Berlin Boeing 737-800 at Düsseldorf airport

A Boeing 737-700 in the new livery of Air Berlin

In 1978 a former Pan Am captain formed Air Berlin as a US supplemental carrier and incorporated it under the name Air Berlin, Inc. in Oregon, USA. Air Berlin traded as Air Berlin USA until the end of the Cold War on October 2, 1990.^[3][4]

West Berlin's special political status during the Cold War era (April 8, 1945 - October 2, 1990) meant that all air traffic to and from the Western half of Germany's divided former and present capital was restricted to the airlines of the three Western victorious powers of World War II, i.e. only those headquartered in the US, UK and France. In addition, all flightdeck crew, i.e. pilots, flight engineers and navigators, flying aircraft into and out of West Berlin through the Allied air corridors were required to hold American, British or French passports.^[5]

The newly formed airline's first aircraft was a Boeing 707-331, which it had acquired second-hand from TWA.[2] This aircraft was stationed at Berlin's Tegel Airport. It was assigned to fulfill a lucrative charter contract to operate a series of short- to medium-haul IT charter flights to the Mediterranean and the Canary Islands on behalf of Berliner Flug Ring, at the time West Berlin's leading package tour operator.^[6] Air Berlin had taken over this contract from Aeroamerica, another US supplemental carrier, which had been based at Berlin Tegel from 1974 until 1979.^[6] In addition to operating inclusive tour (IT) charter flights from Berlin Tegel under contract to Berliner Flug Ring, Air Berlin also operated a weekly scheduled service from Tegel via Brussels to Orlando, Florida, USA, for a brief period during the early 1980s.^[7]

Air Berlin initially augmented its fleet through the acquisition of additional, second-hand Boeing 707s. These were replaced with more modern, second-hand Boeing 737-200 "Advanced", which were more appropriate for the airline's IT operations from Berlin, from the spring of 1981.^[8]

Eventually, Air Berlin transitioned to a fleet entirely composed of brand-new Boeing 737-300/400s during the late 1980s.^[9] This coincided with the introduction of a new livery.^[9]

Following Germany's reunification on October 3, 1990, German investors acquired a majority stake in the company and Joachim Hunold, a former LTU manager, became the CEO. The airline was re-registered under German law and renamed Air Berlin GmbH & Co. Luftverkehrs KG.^[3] The airline joined IATA and started scheduled flights to European business capitals, such as London, Zurich, Vienna and Barcelona in 1997. In January 2004, Air Berlin announced cooperation with former Formula One driver Niki Lauda's newly founded airline Niki and took a 24% stake in Niki.^[3].

In 2006, Air Berlin successfully completed an initial public offering on the Frankfurt Stock Exchange. Originally scheduled for 5 May 2006, it was postponed until 11 May 2006; the company cited recent rises in fuel costs and other market pressures leading to limited of investor demand and reduced the initial share-price range from €15.0-17.5 to €11.5-14.5 and the stock opened at €12.0. 42.5 million shares were sold in the IPO. Of this, 19.6 million were new shares increasing capital in the company, and the remainder to replay loans extended by the original shareholders and invested in the company earlier in 2006. After the IPO, the company claimed to have over €400 million Euros in cash to fund further expansion, including aircraft purchases.^[10]

Later in 2006 Air Berlin announced that it had acquired 100% of the shares in dba ^[11] and in August 2006, the acquisition was formally completed. In March 2007, Air Berlin took over German charter airline LTU International, thereby creating the fourth largest airline group in Europe (in terms of passenger traffic), carrying 22.1 million passengers in 2006. At the same time, Air Berlin acquired a 49% shareholding in Swiss airline Belair owned by tour operator Hotelplan.^[12]

An Airbus A319 in the interim livery of Air Berlin

A Boeing 737-800 in the old livery of Air Berlin

Recent Developments

In 2007, a new livery was brought in first shown on Airbus A319.^[13]

On 20 September 2007, Air Berlin announced that it would acquire its competitor Condor Airlines in a deal that would give Thomas Cook a 30% stake in Air Berlin.^[14] A variety of considerations, including the rapidly increasing price of jet fuel, led to the abandonment of the deal in July 2008.

In June 2008, Air Berlin's CEO, Joachim Hunold, claimed in an op-ed^[15] in Air Berlin Magazine that the government of the Balearic Islands was trying to impose the use of Catalan in their flights from and to Majorca. He said that Air Berlin is an International airline and therefore does not have to use Catalan language, which he described in a derogatory way. Hunold went on to criticise the language policy in Catalonia and the Balearic Islands, claiming erroneously that today many children cannot speak Spanish.^[16] Hunold's remarks were not well received in the Balearic Islands and Catalonia where his views, such as his preference for "imperial" languages, have been considered supremacist. The Balearic Islands' socialist President, Francesc Antich, explained that his Government had simply sent a letter to encourage airlines operating in the Balearic Islands to include Catalan among the languages they use with their customers, whether that be through staff training or recorded announcements as used by other airlines, and offering them support in doing so.^[17] The Catalan language is used to some extent by several other international airlines, including Easyjet, Ryanair and American Airlines, as can be seen on their respective web pages. As a result of Humbold's comments, FC Barcelona refused to use an Air Berlin plane to fly to the United States for their 2008 pre-season tour.

On June 18, 2008 [3], Air Berlin announced that they would be permanently grounding 14 short-haul aircraft and reducing recently launched long-haul services in an effort to increase profitability throughout the network. This would effectively reduce cut overall flight capacity by 10 percent, although long-haul flight capacity would be cut by 30 percent. In addition, it was announced that Cape Town, Windhoek and Bangkok flights would be reduced, while flights to Miami, Cancun and Montego Bay would be increased.

Services

Air Berlin does not operate with a pure low-cost carrier model: most notably, instead of just point-to-point service, Air Berlin offers guaranteed connections via its hubs. The airline offers including inflight snacks, meals, and drinks. Meals for purchase are available on short haul routes over 90 minutes; meals must be purchased during a period spanning from 30 days to 48 hours before the flight.^[18] Drinks and snacks (for routes up to four hours) are free on all flights. Free meals exist for flights four hours or longer, on flights to Agadir and Funchal, and for intercontinental flights.^[19] The airline also has newspapers on board,^[20] assigned seating^[21] and a frequent flyer program.^[22] As such, Air Berlin's model follows that of US low-cost carriers rather than European ones.

Codeshare agreements

• Belair
• LTU International
• Luftfahrtgesellschaft Walter
• Niki
• Hainan Airlines Berlin-Beijing, Brussels-Beijing, and Budapest-Beijing

Destinations

Main article: airberlin destinations

Fleet

Air Berlin Boeing B737-700 in Boeing livery

The Air Berlin fleet (including Belair & LTU International) consists of the following aircraft (as of 1 December 2008) [4]:

As of 7 November 2008, the average age of the Air Berlin fleet is 6.1 years ([5]).

On November 28, 2006, Boeing announced that Air Berlin intended to purchase 60 Boeing Next-Generation 737-800 and also identified an order placed earlier in 2006 for 15 Boeing 737-700 aircraft. The combined value of the 75 airplanes would be $5.1 billion at list prices. Apparently, Air Berlin also has 10 unfilled 737-700s from a dba order announced in 2005. Air Berlin expects to take delivery of a total of 85 737s, starting in November 2007.^[6] All 85 737s will be equipped with blended winglets, which significantly improve fuel efficiency.

On July 7, 2007, Air Berlin announced an order for 57 Boeing 787-8 Dreamliners with options and purchase rights for more. ^[23]. Three more B787-8 will be leased from ILFC and will start its service in 2011.

Notes

References

• Berlin Airport Company - Monthly Timetable Booklet for Berlin Tempelhof and Berlin Tegel Airports, several issues (German language edition only), 1968-1992. West Berlin, Germany: Berlin Airport Company. 
• Flight International. Sutton, UK: Reed Business Information. ISSN 0015-3710.  (various backdated issues relating to Air Berlin, 1979-2007)

External links

• Air Berlin
• Air Berlin Fleet
• Air Berlin: Investor Relations

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