Air Berlin saw losses in 2011

Published:  19 Mar at 6 PM

As reported by the BBC, Germany's second biggest airline, Air Berlin, reported bigger-than-expected losses in 2011 as it maintains its efforts to downsize.

The budget airline revealed a net loss of 271.8 million euros ($322 million; £205 million) for 2011. The carrier saw a loss of 97.2 million euros in 2010.

Air Berlin has blamed its poor performance on labour strikes, rising fuel costs, Arab spring, bad weather and a new tax. The company is 30% owned by Abu Dhabi carrier Etihad. The airline’s revenues went up 13.7% to 4.23 billion euros, while the amount of passengers increased by 1.2% to 35.3 million.

CEO Hartmut Mehdorn said that, despite record turnover and passenger numbers, the firm cannot yet be satisfied with the 2011 figures. The severe winter affecting Europe in early 2011, air-traffic control strikes and Arab Spring and put the results “well-below expectations", he said.

The firm has urged the government to get rid of a new air traffic control levy introduced in 2011. The tax is “environmentally nonsensical” and caused a distortion of competition, argued Mr Mehdorn.

The struggling firm is in the midst of an efficiency drive meant to cut 200 million euros from its 2012 costs. However, it will be hard to predict whether it can make a profit in 2012 in light of the worsening economy, said Mr Mehdorn.