Air Berlin needs a new business model

IEG aviation expert Dr. Ulrich Puls talks about the tense situation of the airline Air Berlin

Experts have doubted Air Berlin's business model for some time now. After Joachim Hunold's retreat, the company had to reorient itself, the aviation investment banker Ulrich Puls told the dpa news agency in Frankfurt on Thursday. Former Deutsche Bahn boss Hartmut Mehdorn, as a tough restructurer, was the right man at the right time. The Turkish major shareholder ESAS Holding could play a key role.

"I know of no other airline in Europe with a business model like Air Berlin," said the Investment Manager of Berlin-based IEG. In the past, the companies had either earned good money with intercontinental flights or with tough low-cost operations, as the Irish airline Ryanair had done.

Air Berlin, on the other hand, is relatively weak on long-haul routes and does not act as a price breaker, said Puls. Hunold had tried to unite the sometimes very different parts of his company under one roof and despite all the growth had not managed to make Air Berlin profitable. "They are tremendously under pressure."

The future of the company is quite uncertain, the expert said. A destruction of the company would also be possible. In this context, the behavior of the partners from the "One World" alliance, under the leadership of Lufthansa's competitor British Airways, was exciting. It would also be conceivable for Air Berlin to cooperate more closely with the Turkish Pegasus airline of the major shareholder ESAS.

"Lufthansa must be interested in maintaining its largest national competitor," said Puls. Air Berlin's strong brand presence may have prevented financially more powerful companies from entering the German market. In the short term, however, the Kranich Line will benefit from the lower supply from Berlin.

The content was taken up with further explanations also at Spiegel Online and in the newspaper Welt.





Source: dpa on 18.08.2011; Header Pic via Fotolia © Lukas Gojda