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After having held the position for nearly 20 years, Joachim Hunold CEO of Air Berlin, the 3rd largest low-cost carrier in Europe, will step aside amid growing losses.

Air Berlin has since announced that it, along with other German carriers, was suffering from a new German air travel tax along with higher fuel costs and found these for competitive reasons difficult to pass on to its customers. Low cost carriers operating and originating from other EU countries are spared this German tax.

This tax alone has reportedly added about 40 million more to Air Berlins costs in this 2nd quarter and local German rival government owned Lufthansa will not go ahead with initially planned increased winter capacity after less than expected revenues.

Air Berlin is in a head-to-head domestic competition with Lufthansa over heavily travelled city pairs like the route Hamburg-Frankfurt and Berlin –Munich.

Hunold, who will step down September 1st, has recommended an interim successor to replace him in the form of Hartmut Mehdorn, former CEO of Deutsche Bahn, and the state-controlled railway.

The carrier said it would cut costs and some routes and instead focus on those routes it deems profitable. Which routes those are has not yet been announced however more than 1 million seats will be withdrawn from its present overall capacity.

It will also scrap unprofitable routes, cut certain frequencies and partially reduce its services from German regional airports and focus on 4 main hubs. Berlin and Vienna being two certain cities which will remain as major Air Berlin hubs and probably Düsseldorf as well.

The airline has said that even with this drastic reduction it will not expect any immediate positive impact on its earnings before the next fiscal year.

Unconfirmed media reports are devaluing Air Berlin, in light of recent stock market reactions to the announcing – company stock value to be circa 213 million Euro, down 33% over the last year.

Previous OTA-Berlin Constituency Blog articles about Air Berlin  -

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