A “far-reaching restructuring” of Air Berlin was outlined yesterday including the loss of up to 1,200 jobs and the redeployment of excess aircraft.

Up to 40 Airbus A320s are to be provided to rival Lufthansa, the loss-making carrier confirmed.

As many as 38 aircraft will be operated under a six year wet lease agreement, which includes aircraft, crew, maintenance, insurance and overhead services. This allows the airline to cut excess capacity while reducing restructuring costs.

Air Berlin will be left with a core fleet of 75 aircraft from summer 2017 consisting of 17 A330 wide body aircraft for long haul flights, 40 A320s and 18 Q400 aircraft for short- and medium-haul flights including to major business centres throughout Europe.

The second largest airline in Germany with almost 9,000 staff is to start discussions with works councils’ representatives with an aim to confirm voluntary and compulsory redundancies by February 2017.

The airline will endeavour to offer re-deployment opportunities within 29% shareholder Etihad Airways group of partner airlines, which include Jet Airways, Air Serbia, Etihad Regional, Alitalia and Air Seychelles.

Chief executive Stefan Pichler said: “Of course, we understand that redundancies are unwelcome, even in a dynamic market such as Germany. 

“We have to make reductions but we will aim to do so in a supportive manner, offering new opportunities to employees where possible.”

The airline will concentrate its core operations as a network carrier serving higher-yielding markets from key hubs in Berlin and Dusseldorf.

Air Berlin’s leisure flying will be combined into an independently operating business unit.

The shake-up follows a comprehensive, bottom-up review of all operations, seeking to improve efficiency, limit seasonality and re-establish a clear market proposition for the airline, according to a statement.

Pichler said: “This far-reaching restructuring of our operations is about a new focus, giving us a new future.

“Now more than ever, we are faced with significant external market pressures which dictate a change to our current complicated business model. 

“Air Berlin has sought to serve all market segments with one operating platform, covering both business and leisure travellers.

“The core Air Berlin proposition in future is now clear – a dedicated focused network carrier serving higher-yielding markets from two hubs in Dusseldorf and Berlin. A leaner, fitter, stronger Air Berlin has a bright future,” he claimed.

The airline’s leisure flying operations will be operated in a separate business unit, “as strategic options are evaluated”.

Pichler added: “Our leisure business has great underlying value which will be stronger in a separate touristic-focused business unit.

“In turn, this allows Air Berlin to focus on its core operation as a network scheduled airline.”

Going forward, the carrier’s profitable long haul programme will be expanded with new routes and additional frequencies, particularly to the US.

The airline’s short- and medium-haul network will concentrate on year-round business markets with a strong focus on Italy, Scandinavia and Eastern Europe. It will also aim to build a higher share of domestic business travel.

“Air Berlin will be a lean business focused on long-haul and higher-yield routes from Dusseldorf and Berlin, which are our two strong catchment areas.
“We are implementing a size and structure for the business that is fit for purpose.  We will see revenues grow and costs contained as a result of this restructuring of our business.”