Air Berlin sees losses widen to $348m in 2011

Air Berlin, Europe’s third-biggest discount carrier, said losses widened last year as tax and fuel expenses crimped margins and the company spent money on a restructuring strategy aimed at lowering the cost base. The Berlin-based airline had a net loss of 265.6m euros ($348m), versus 97.2 million euros a year earlier, as revenue rose 14 percent to 4.23bn euros, it said today in a statement. The average loss estimated by analysts surveyed by Bloomberg News was 169m euros. Air Berlin is almost 30 percent owned by Etihad Airways after the Abu Dhabi-based carrier agreed a $350m package of financing and funds for planes in December. The Gulf carrier reckons a 105m-euro equity investment will be recouped in extra revenue in two years, making it a better bet for cracking the tightly regulated German market than adding new airliners. Air Berlin has cut routes and flights as an economic slump hurts demand, reducing capacity by more than 1 million seats to save 250m euros and pare debt by 50 million euros. It’s postponing receipt 19 jets in 2012 and 2013 and closing bases in Erfurt and Dortmund, shaving $508m from spending. The carrier’s operating loss widened to 247m euros from 9.3m euros. Deutsche Lufthansa, Germany’s biggest airline, reported a full-year net loss of 13m euros on February 7 as high fuel costs and the unprofitable UK-based BMI unit that it’s in the process of selling weighed on profits.