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Sad news for Germany’s second largest airline

Trouble for Air Berlin

Disappointing news for Germany’s second largest airline.  The Berlin based Air Berlin has just announced plans to lay off 1200 employees and get cut 75 aircraft from its fleet. To counter some of the losses Air Berlin plans to lease 40 of its Airbus 320 aircraft to it’s competitor Lufthansa group1. This disappointing news comes as the struggling airline abandoned it’s earlier promises this year to return to profitability2. To regain profitability, Air Berlin will reduce it’s less profitable short and medium haul flights while expanding it’s more lucrative long haul service, especially to the United States. Air Berlin plans to expand it’s offering to the United States by 40% adding routes to Orlando, San Francisco and Los Angeles.

In the meantime, Lufthansa has said that they will use 35 of the leased planes in it’s Low Cost brand Eurowings to counter growing competition from Ryanair and Easyjet3. The other 5 aircraft will go to Lufthansa’s subsidiary Austrian Airlines. For Lufthansa this deal is an obvious win. Lufthansa will use the new aircraft to expand Eurowing’s routes from secondary hubs like Munich. Lufthansa will also be expanding its routes to the popular holiday destination Majorca. In combination with Lufthansa Group’s recent acquisition of Brussels Airlines, this new expansion has positioned Lufthansa Group to be the dominant airline in western Europe4.

1http://www.cnbc.com/2016/09/28/the-associated-press-germanys-air-berlin-to-shed-75-aircraft-1200-jobs.html

2https://global.handelsblatt.com/edition/414/ressort/companies-markets/article/air-berlins-future-up-in-the-air

3http://www.travelweekly.com/Travel-News/Airline-News/Struggling-Air-Berlin-reduces-fleet

4https://airwaysmag.com/airlines/etihad-restructures-air-berlin-lufthansa/