Air Berlin to sell planes to improve equity ratio
Loss-making Air Berlin will sell eight of its planes in order to improve its equity ratio, which plummeted in the first half of the year to just 4 per cent.
Air Berlin, which has not posted an annual operating profit since 2007, is trying to shrink its way back to profitability after growing rapidly and racking up debt. Abu Dhabi-based Etihad Airways, which holds a 29 per cent stake, has also provided loans.
Germany’s second-biggest carrier after Lufthansa said last week its equity had plummeted by about two-thirds to €101.3m by the end of June.
That gave it an equity ratio of 4 per cent, compared with 11.2 per cent as at the end of December 2011. By the end of July, its equity had improved by €60m already, it said today, adding that the ratio should be higher at the end of 2012 than the end of last year.
It said today it decided in the second quarter to sell eight of its own aircraft, although transactions had not been
completed by end-June.
“The sale is expected to result in a profit. Both the equity ratio and the liquidity position will noticeably benefit from the transaction,” the airline said in its interim report.