airberlin continues to shrink. Etihad remains supportive, but internal solution is needed
airberlin's 2015 losses highlighted its ongoing struggle to find a successful model. In 2012 airberlin received investment from Etihad (also entering into a close commercial partnership with it) and joined oneworld. These moves have brought it benefits in terms of traffic and revenue, but traffic and revenue continue to shrink and airberlin has remained loss-making.
Since 2011 airberlin has cut capacity heavily on the short/medium haul network (particularly in domestic markets). Short/medium haul still dominates airberlin's operation, but it is now growing its long haul network aggressively by adding capacity to North America and the Caribbean. Squeezed between lower-cost LCC competition on short/medium haul routes on the one hand, and legacy airlines with bigger long haul networks on the other, it is also now facing low cost long haul competition from Lufthansa's Eurowings.
On 31-May-2016 the Etihad Aviation Group CEO, James Hogan, said: “airberlin has faced greater challenges and has taken longer than we expected to reach sustainable profitability, but the underlying fundamentals of the business are trending in the right direction." Etihad's investment has been critical to airberlin's survival and the airline has, so far, remained committed to the relationship. However, there is only so much that Etihad can do from the outside. airberlin needs internal solutions.
Become a CAPA Member to access Analysis Reports
Our Analysis Reports are only available to CAPA Members. CAPA Membership provides exclusive access to in-depth insights on the latest developments in the aviation and travel industry, developed by our team of dedicated analysts located in Europe, North America, Asia and Australia.
Each report offers a fresh perspective on the latest industry trends and is available online or via the CAPA mobile app, with customisable alerts to help you stay informed and identify new business opportunities.
CAPA Membership also provides access to our full suite of tools, including a tailored selection of more than 400 News Briefs every weekday and comprehensive data and analysis on thousands of companies around the world.