airberlin SWOT: even Etihad's millions can't help it to profit in year of peak airline sector margin

James Hogan, the CEO of Etihad Airways, which owns a 29% stake in airberlin in addition to minority stakes in other European airlines, was recently reported saying that Etihad would not increase these holdings, even if the EU were to change foreign ownership limits. Etihad has already provided more than EUR800 million in various forms to airberlin since 2012. The German airline now needs time to implement its fourth restructuring plan since 2011.

After several years of losses, airberlin's results for 9M2015 - another operating loss that only narrowed slightly due to asset disposals - suggest that it will not fulfil its Mar-2015 promise of "significantly improved results" in 2015. Another big loss looks likely, in a year when the global airline industry is set to record margins consistent with historic cyclical peaks and fuel prices are lower than they have been since airberlin last made an annual operating profit.

In this report, we assess airberlin's strengths, weaknesses, opportunities and threats. It seems that Etihad is right not to throw more good money after bad.