Air Berlin PLC share price down, revenue falls as it warns of wider net loss

Air Berlin PLC stated lower revenue for the third quarter and said net loss could be bigger than previously expected because of costs related to the plan to return the company to profit.

Net loss could exceed €350 million, projected Germanys second biggest carrier, as it reported a 2.5% decline in revenue to €1.31 billion for the three months ended September 30. Net profit fell more than 50% in the quarter to €49.9 million, compared with the €101 million of last year.

CFO Ulf Hüttmeyer said the total amount of restructuring costs for the year will be around €100 million, €15 million of which the company already booked in the recent quarter.

Under the plan to return the company back to profit, Air Berlin will dispose of 200 more employees, following the 840 positions already cut. The company has also closed some airways and voided plane orders this year.

“There is no free lunch” Mr. Hüttmeyer said on a call with reporters. Air Berlin is aiming to generate €400 million extra earnings by 2016, of which at leash half should be achieved next year, he added.

Etihad Airways, which owns a 29.2% stake in the German carrier, has aided Air Berlin by providing financial support and thus improved the companys liquidity position for its restructuring program.

Air Berlin will change its leadership figure next year. Stefan Pichler will be appointed as the new CEO on February 1, while Wolfgang Prock-Schauer will step down and return to his role of head of strategy.

Operating profit for the third quarter fell 35% to €74.9 million versus last years result of €115.6 million. However, the company projected operating profit to increase by a double digit in the final quarter of this year. Air Berlin also predicted this years earnings to improve over last years level, excluding restructuring costs.

Under the restructuring plan, Air Berlin canceled in September a $5 billion order for Boeing jets. The company said it will be looking to acquire more A320 narrow-body planes and it will take over 14 machines from another European airline.

Air Berlin will use the A320 for shorter flights and the A330 wide-body planes for longer ones. The company has previously said its reducing capacity by 5% and cutting flight crew by one-third to 10.

Air Berlin PLC gained 1.57% on Wednesday and closed at €1.23 in Frankfurt. On Thursday the stock lost 1.63% to trade at €1.21 at 14:47 GMT, marking a one-year decrease of 31.68%. The company is valued at €143.66 million. According to the Financial Times, the 4 analysts offering 12-month price targets for Air Berlin have a median target of €1.35, with a high estimate of €1.50 and a low estimate of €0.70. The median estimate represents a 9.76% increase from the last close price of €1.23.