airberlin is achieving substantial recapitalisation as the basis for an accelerated turnaround leading to sustainable profitability

(DGAP-Media / 27.04.2014 / 22:07) 
 
 
  - Cash inflow amounting to a total of 450 million euros for accelerated 
    turnaround 
 
  - Of that, 300 million euros through subordinated perpetual convertible 
    bond 
 
  - Strengthening of capital and liquidity 
 
  - Bond issue to fund exchange offer for existing bonds due 2014 and 2015 
    and to raise an additional 150 million euros 
 
  - Strengthening of the Management Board with a deeper focus on 
    accelerated and intensified operational restructuring and revenue 
    generation 
 
  - Best customer service for guests and partners remain core principle 
 
  - 2013: a challenging year with an operating loss of 231.9 million euros 
 
airberlin has set necessary preconditions to accelerate and deepen the 
turnaround leading to sustainable profitability. By means of a substantial 
recapitalisation, the company will receive a cash inflow of 450 million 
euros before the end of 2014, equipping airberlin with an improved 
financial structure for a deeper and comprehensive restructuring. 
 
This recapitalisation is based on two pillars: first, Etihad Airways has 
subscribed to a convertible bond in the amount of 300 million euros. As 
this is a perpetual subordinated bond, it will be posted as equity under 
IFRS accounting principles. 
 
Second, in order to further strengthen the financial structure, airberlin 
will issue a bond in the amount of a minimum of 150 million euros. This 
bond is arranged by Anoa Capital. The proceeds will be used for general 
corporate financing purposes. Further the holders of the 2014 and 2015 
bonds will be offered to exchange their existing bonds at preferential 
terms as set out in the exchange offer into the new bonds with a maturity 
in 2019. In addition, airberlin has a partially undrawn credit facility 
from its largest shareholder, the maturity of which has been extended from 
2016 to 2021. After the recapitalisation the current ownership structure of 
Air Berlin PLC will remain unchanged. 
 
To strengthen management capacity for the turnaround-process, the 
Management Board of airberlin will be expanded to include the function of a 
Chief Restructuring Officer (CRO). Effective May, Marco Ciomperlik will 
take up responsibility to coordinate and drive the restructuring and 
turnaround process in his role as CRO. 
 
 
In previous years, Marco Ciomperlik has worked in a leading role in 
consultancy companies and the last five years in the role of Chief 
Maintenance Officer at airberlin where he successfully implemented 
restructuring projects in his area of responsibility. As already announced 
Götz Ahmelmann will assume responsibility as Chief Commercial Officer as of 
1 July 2014. Götz Ahmelmann has extensive experience in all commercial 
areas of aviation, most recently as of Head of European Sales at 
airberlin's main competitor. 
 
"On the basis of an improved financial structure, with a strengthened 
management capacity, we are able to intensify and accelerate the 
fundamental restructuring of the business," said Wolfgang Prock-Schauer, 
CEO airberlin. "Even though the Turbine efficiency program has delivered 
according to plan and will take full effect in 2014, we have to increase 
the pressure during implementation, drive further measures as well as 
thoroughly evaluate our possible courses of action including airberlin's 
long-term business model. This restructuring will focus on efficiency, 
while our core proposition to offer best service to our guests and partners 
remains unchanged. We value the confidence our shareholders and the capital 
market have placed in us to enable a more fundamental restructuring." 
 
Wolfgang Prock-Schauer also called upon Germany's authorities to put more 
emphasis on creating a positive business environment for the aviation 
industry including the abolishment of the aviation tax. For airberlin, last 
year's tax payment amounted to 142.9 million euros. 
 
"With our successful and comprehensive recapitalisation we have the 
necessary financial breathing space to deeply restructure the airline and 
bring it back to operative profitability. We are putting out an attractive 
offer to exchange the 2014 and 2015 bonds with the aim to further ease and 
streamline the maturity profile going forward in order to support the focus 
on operational restructuring", said Ulf Hüttmeyer, Chief Financial Officer 
of airberlin 
 
In 2014 already scheduled further Turbine measures will be implemented with 
the introduction of a new Revenue Management System, the further 
optimisation of the airline's network and fleet structure and improvement 
of staff productivity. Furthermore, the synergies with partners Etihad 
Airways on the one hand and oneworld(R) carriers on the other hand will 
show continuous improvements. To evaluate the efforts and support the top 
management in the implementation of a deeper and more radical restructuring 
airberlin will commission a management consultancy. 
 
These intensified efforts have to be seen in the context of a challenging 
environment. airberlin closed the 2013 financial year with an operating 
loss (EBIT) of 231.9 million euros. The Turbine efficiency program achieved 
the desired contribution of 200 million euros to the cost and turnover side 
and a number of performance indicators delivered positive results. However, 
the company was faced with an unexpectedly sluggish summer season due to 
high temperatures in Central Europe, followed by the traditionally 
difficult winter period. 
 
airberlin carried 31.5 million guests last year, the fourth year in 
succession in which the company exceeded the 30-million mark. By focussing 
on core routes airberlin managed to achieve a better market position and to 
increase capacity utilisation by five percentage points to 84.8%. Optimised 
flight schedules enabled the company to reduce the fleet by 15 aircraft to 
140 and to increase its leading market position in its two most important 
hubs Berlin and Dusseldorf. 
 
With a reduced capacity offer of 5.1%, group revenues fell by 4% to 4.147 
billion euros. The yield (revenue per passenger) increased by 0.8% to 121.0 
euros (previous year: 120.1 euros). Revenue per available seat kilometre 
(RASK) increased in 2013 by 1.3% to 7.24 euro cents (previous year: 7.15 
euro cents) while the costs per available seat kilometre (CASK) rose by 
3.5% including fuel and restructuring charges. 
 
Collaboration with Etihad Airways and other partners was further expanded 
last year. The partnership with Etihad Airways led to a significantly 
higher shared turnover of 200 million euros on joint codeshare routes. More 
than 560,000 joint codeshare passengers flew in the network - an increase 
of 75.3% compared to the previous year. 
 
The number of flight guests on joint codeshare routes with oneworld 
partners also increased significantly in 2013 to over one million, and more 
than doubled compared to the previous year. 
 
As at 31st December 2013 and therefore before the recapitalisation, 
airberlin had equity capital of minus 181.9 million euros, liquid assets of 
223 million euros and a partially undrawn credit facility of US$ 120 
million. 
 
airberlin is one of the leading airlines in Europe and flies to 147 
destinations worldwide. The second largest 
airline in Germany carried more than 31.5 million passengers in 2013. 
airberlin offers a global route network 
through its strategic partnership with Etihad Airways, which has a 29.21% 
share in airberlin, and throughmembership of the oneworld airline alliance. 
The airline with the award-winning service operates codeshare flights 
worldwide with 16 airlines. The fleet has an average age of five years and 
is among the most modern and eco-efficient in Europe. 
 
Press Contact: 
Uwe Berlinghoff 
Senior Vice President Communications 
phone: [phone] 
fax:    [phone] 
e-mail: [e-mail] 
www.airberlin.com 
www.facebook.com/airberlin 
 
 
End of Media Release 
 
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Issuer: Air Berlin PLC 
Key word(s): Enterprise 
 
27.04.2014 Dissemination of a Press Release, transmitted by DGAP - a 
company of EQS Group AG. 
The issuer is solely responsible for the content of this announcement. 
 
DGAP's Distribution Services include Regulatory Announcements, 
Financial/Corporate News and Press Releases. 
Media archive at www.dgap-medientreff.de and www.dgap.de 
 
=-------------------------------------------------------------------- 
 
 
Language:    English 
Company:     Air Berlin PLC 
             The Hour House, High Street 32 
             WD31ER Hertfordshire, Rickmannsworth 
             United Kingdom 
Phone:       [phone] 
Fax:         [phone] 
E-mail:      [e-mail] 
Internet:    ir.airberlin.com 
ISIN:        GB00B128C026 
WKN:         AB1000 
Indices:     SDAX 
Listed:      Regulierter Markt in Frankfurt (Prime Standard); 
             Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, 
             München, Stuttgart 
 
 
End of News    DGAP-Media 
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264891 27.04.2014 
 

(END) Dow Jones Newswires

April 27, 2014 16:07 ET (20:07 GMT)