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Air Berlin Plc, the German airline that’s 29 percent-owned by Etihad Airways PJSC, said its second-quarter loss widened as costs increased as the carrier switched to an all-leased fleet and the euro declined against the dollar.
The loss before interest and taxes almost quadrupled to 62.7 million euros ($69.9 million) from 15.9 million euros a year earlier, Germany’s second-largest airline said Wednesday in a statement. Revenue fell 9.4 percent to 970.6 million euros. Too much capacity across the industry, coupled with uncertainty stemming from terrorist attacks, will continue to depress fares during the peak summer months, Air Berlin said.
Chief Executive Officer Stefan Pichler is under pressure to turn Air Berlin around following seven annual losses in eight years that prompted several bailouts by Abu Dhabi-based Etihad, its biggest investor. The German carrier outlined plans on Aug. 5 to offer business-class seats on flights within Europe in what it called “the beginning of a far-reaching transformation.” It’s in talks on transferring about 40 planes along with crews to the Eurowings discount unit of larger competitor Deutsche Lufthansa AG, people familiar with the matter said in July.
Air Berlin dropped as much as 7.5 percent, the steepest intraday drop since July 25, and was trading down 1.1 percent at 70 cents as of 9:26 a.m. in Frankfurt. The stock has plunged 24 percent this year, valuing the company at 81.4 million euros.
Leasing costs rose 12 percent in the quarter as the number of leased planes increased and because of the strong dollar, Air Berlin said. The average fare charged fell 5.8 percent to 109.39 euros in the period.
©2016 Bloomberg L.P.
This article was written by Richard Weiss from Bloomberg and was legally licensed through the NewsCred publisher network.