Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Air Berlin - More Job Cuts; Restructuring Slowed  
User currently offlineLAXintl From United States of America, joined May 2000, 25546 posts, RR: 50
Posted (1 year 6 months 1 week 2 days 18 hours ago) and read 5465 times:

Air Berlin continues to see ever more adjustments.

Company has announced another round of 900 employee cuts as part of its "Turbine 2014" turnaround program.
Company will now also seek to realign the entire group organization also. The fleet will be trimmed by 12 aircraft in 2013 ending the year with 142. 15 aircraft were removed in 2012.

The continued global economic turmoil along with continued high fuel prices have slowed the restructuring plan "the path to sustainable profitability is longer than expected."

One major objective this year for the company is to reduce its debt load, for which it is working closely with Etihad on.

Stories
http://www.nasdaq.com/article/air-be...-jobs-20130320-00480#ixzz2OfiLWY9d
and
http://www.bloomberg.com/news/2013-0...moil-hampers-turnaround-plans.html

=


From the desert to the sea, to all of Southern California
21 replies: All unread, jump to last
 
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1554 posts, RR: 2
Reply 1, posted (1 year 6 months 1 week 1 day 22 hours ago) and read 4773 times:

I have yet to hear of a coherent strategic plan for what Air Berlin will become after all this restructuring. Will it become a network hub carrier, a hybrid LCC, still a charter airline ???

Seems all they are doing is very much cutting without much speaking of where Air Berlin will sit in market placement when all said and done.


User currently offlineLAXintl From United States of America, joined May 2000, 25546 posts, RR: 50
Reply 2, posted (1 year 6 months 1 week 1 day 7 hours ago) and read 4522 times:

Good point - what is AB's niche ?

This seems to be an enduring question and likely part of its problem as it tries to be many different types of airlines all at once.



From the desert to the sea, to all of Southern California
User currently offlineCaptainCrackers From New Zealand, joined May 2010, 127 posts, RR: 1
Reply 3, posted (1 year 6 months 1 week 1 day 3 hours ago) and read 4356 times:

Quoting mercure1 (Reply 1):
I have yet to hear of a coherent strategic plan for what Air Berlin will become after all this restructuring. Will it become a network hub carrier, a hybrid LCC, still a charter airline ???

It'll continue to be all three! That's the strategic plan!


User currently offlineCaptainCrackers From New Zealand, joined May 2010, 127 posts, RR: 1
Reply 4, posted (1 year 6 months 1 week 1 day 3 hours ago) and read 4336 times:

Quoting LAXintl (Thread starter):
Company has announced another round of 900 employee cuts as part of its "Turbine 2014" turnaround program.

I'm pretty sure that it's still Turbine 2013 and that those 900 job cuts are the same 900 that were announced late 2012. As far as I can tell, only 150 or so jobs have been cut so far, and the remaining number will go over the course of the year.

[Edited 2013-03-28 01:59:17]

User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1554 posts, RR: 2
Reply 5, posted (1 year 6 months 1 week 21 hours ago) and read 4124 times:

Quoting CaptainCrackers (Reply 3):
It'll continue to be all three! That's the strategic plan!

Kinda crazy to keep sticking to so many differing activities

AB needs to pick what they will become and focus on such track.

For example -
- network/hub carrier aligned well to mesh with OW and Etihad
- European hybrid LCC
- Medium/longhaul beach/leisure carrier
- Charter /tour operator

It seems each one of these has contradictory needs. From marketing, product, service and even fleet needs.

I think trying to be all is guarantee for continued failure I see.

Consumer will be confused what AB is about.


User currently offlineLAXintl From United States of America, joined May 2000, 25546 posts, RR: 50
Reply 6, posted (1 year 6 months 1 week 15 hours ago) and read 3923 times:

Yes certainly I think there is indeed good deal of confusion as to what AB is in the eyes of the consumer and its market placement.

For one person they might be the charter holiday airline taking them to a beach destination far away, to another a low fare means to get around Europe, and to another a business carrier to get around inside Germany in association with OneWorld partners.

Clearly having ones feet in so many different areas complicates the operation and creates product perception issues in trying to define an enterprise in the eyes of the traveler.



From the desert to the sea, to all of Southern California
User currently offlineLOWS From Austria, joined Oct 2011, 1163 posts, RR: 1
Reply 7, posted (1 year 6 months 1 week 15 hours ago) and read 3902 times:

Quoting mercure1 (Reply 5):
Consumer will be confused what AB is about.

Today in Salzburg I saw:

1. An advertisement for Air Berlin's new business class seat.
2. An advertisement for a flight/ package tour to Hurghada...operated by....Air Berlin.

Hell, I'm confused.


User currently offlineIndianicWorld From Australia, joined Jun 2001, 2986 posts, RR: 0
Reply 8, posted (1 year 6 months 1 week 7 hours ago) and read 3710 times:

Quoting LOWS (Reply 7):
Hell, I'm confused.

Thats certainly the problem with any carrier that tries to be all things to all people. This New World Carrier tag that Virgin Blue (now Virgin Australia) and AB have seemingly used in the past really starts to make less and less sense, given the lack of clear market positioning.

In the end Virgin Blue evolved to chase higher yields and I would suspect that AB will either have to create a dual branded strategy or move to one end of the market.


User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1554 posts, RR: 2
Reply 9, posted (1 year 6 months 6 days 16 hours ago) and read 3378 times:

So what path should Air Berlin emulate?

Seems with Etihad investment, and oneworld membership, the path to becoming a true mainline carrier rivaling Lufthansa in Germany seems more sensible focus.

Either way, I think it should focus on single market strategy and move away from confused place of being many airline models in one.


User currently offlineLAXintl From United States of America, joined May 2000, 25546 posts, RR: 50
Reply 10, posted (1 year 6 months 5 days 19 hours ago) and read 3178 times:

Whatever Air Berlin does I think it will face challenges.

However with Etihad footing much of the money, it seems they will have a big say, and running a traditional hub focused airline operation probably meshes better with Etihad's own ambitions.

So in the long run I would think the shorthaul LCC concept along with leisure tour operator models will need to change at AB.



From the desert to the sea, to all of Southern California
User currently offlineBestWestern From Hong Kong, joined Sep 2000, 7165 posts, RR: 57
Reply 11, posted (1 year 6 months 5 days ago) and read 2942 times:

Carriers, like Aer Lingus, manage to operate a quality long haul product alongside a lower cost single cabin high density short haul product.

It's all about developing a product that is relevant to the customer base, and perceived to be good value.



The world is really getting smaller these days
User currently offliner2rho From Germany, joined Feb 2007, 2641 posts, RR: 1
Reply 12, posted (1 year 6 months 4 days ago) and read 2670 times:

Quoting mercure1 (Reply 1):
I have yet to hear of a coherent strategic plan for what Air Berlin will become after all this restructuring. Will it become a network hub carrier, a hybrid LCC, still a charter airline ???

Indeed, AB seems to only be cutting to the bone without any sort of long-term plan of what they want to be when the cuts are over. Kinda similar to the "restructuring" happening at IB too.

Quoting mercure1 (Reply 5):
It seems each one of these has contradictory needs. From marketing, product, service and even fleet needs.
I think trying to be all is guarantee for continued failure I see.
Consumer will be confused what AB is about.

Crazy idea, but why not resurrect the old LTU brand? AB could keep it all but without the confusion: AB as a quality network carrier, while offloading all the sun&beach operations to a new lower-cost-base LTU. Two products within the same airline group with full codesharing etc, like LH-4U or IB-VY.


User currently offlinereifel From Germany, joined Feb 2005, 1361 posts, RR: 1
Reply 13, posted (1 year 6 months 4 days ago) and read 2657 times:

What is interesting though, is that what we all so as no strategy since years, other carriers start to do it now:
i.e. LH goes More and more Low Cost with Germanwings, they also started to make full charters to tour operators on weekend (i.e. Palma, Ibiza, Antalya), plus they also serve more and more holiday destinations (i.e. Bastia, Palma here as well etc).

I believe what defintely is a misperception is that AB is an LCC. They are part of an alliance, uses hubs, available through all major GDSs, bookable through resellers, have catering etc. It has been years I don't see why they should been considered as an LCC, as they offer more than quite a lot of other european airlines (especially southern: Italy and Spain, a market which they are quite active in).


User currently offlineLAXintl From United States of America, joined May 2000, 25546 posts, RR: 50
Reply 14, posted (1 year 6 months 3 days 20 hours ago) and read 2552 times:

Quoting reifel (Reply 13):
I believe what defintely is a misperception is that AB is an LCC. They are part of an alliance, uses hubs, available through all major GDSs, bookable through resellers, have catering etc. It has been years I don't see why they should been considered as an LCC, as they offer more than quite a lot of other european airlines (especially southern: Italy and Spain, a market which they are quite active in).

AB itself is to blame imo for this confusion.

AB has evolved basically into a high-end (with higher cost base) LCC. They still earn revenues and try to position themselves as the LCC option often against folks like LH, but they have cost inefficienty of all the things you mention like hubs, catering, GDS, mixed fleet, products, etc.

Its almost the worst of two worlds. Earn meager revenues, with high cost base.

Then add in the further operational complexities of trying to be a sun/beach tour operator, and then also a longhaul value player left over from LTU you can see why the market has a misperception of AB.

For OW yes they are a member, but they are not a traditional hub focused airline with broad network connection option for alliance passengers, nor offer traditional high end product offerings like own airport lounges(except DUS). Then add in the Etihad partnership whose direction is far from clear still.

So at the end, the AB brand is stuck in 2, 3, maybe 4 different worlds in the eyes of the consumer.



From the desert to the sea, to all of Southern California
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1554 posts, RR: 2
Reply 15, posted (1 year 6 months 3 days 17 hours ago) and read 2428 times:

Quoting reifel (Reply 13):
i.e. LH goes More and more Low Cost with Germanwings, they also started to make full charters to tour operators on weekend (i.e. Palma, Ibiza, Antalya), plus they also serve more and more holiday destinations (i.e. Bastia, Palma here as well etc).

Not problem for Lufthansa as everyone knows what Lufthansa is. Also LH Group has many clearly segmented brands.

Problem is Air Berlin is trying to do everything under one brand name. Gone is LTU which I think many understood as charter and longhaul leisure airline, and also soon will essentially be gone completely FlyNiki as well.

Everyone left with this confused situation of Air Berlin trying to be so many different things under one label.


User currently offliner2rho From Germany, joined Feb 2007, 2641 posts, RR: 1
Reply 16, posted (1 year 6 months 2 days 21 hours ago) and read 2230 times:

Quoting reifel (Reply 13):
I believe what defintely is a misperception is that AB is an LCC.

I have always said that their LCC origins are definitely hurting their brand image. At least in Y, AB service is on par or better than any other legacy in th EU. However, AB is not preceived as a full-service carrier by the public, therfore they are unable to charge a premium for their service. Heck, I've even seen some supposedly knowledgeable aviation media still classify AB under the LCC segment, which they left some time ago.

Quoting LAXintl (Reply 14):
Its almost the worst of two worlds. Earn meager revenues, with high cost base.

  


User currently offlineSCQ83 From United States of America, joined Oct 2012, 958 posts, RR: 0
Reply 17, posted (1 year 6 months 2 days 20 hours ago) and read 2182 times:

Quoting LAXintl (Reply 14):
So at the end, the AB brand is stuck in 2, 3, maybe 4 different worlds in the eyes of the consumer.

I was reading the other day in a Spanish newspaper that they want to increase their business traffic share in Spain-Germany with the new MAD-TXL route... hello? Which kind of business traffic there is between Berlin and Madrid today (I doubt it is growing).... who would fly Germany-Spain for business other than LH (and even IB) to connect in TXL with AB of all places and companies? And now they closed their Spanish domestic routes from PMI but they started codesharing with YW.

They remind me of Air Europa... they would open a "charter" route to the Caribbean today, and tomorrow a "business" route to GVA or BRU... completely schizophrenic. And ironically, if you want to fly to Berlin from major places in Europe... and they don't even fly there... I lived in BRU for a while and when I tried visiting friends in Berlin I discovered with surprise they don't serve BRU-BER (so everything is for Brussels/Lufthansa and Easyjet). And the same for other major cities like AMS. And that from their major hub (with permission of DUS) for which they are get their name... and again I am talking about Brussels and Amsterdam (!).

I personally think they should have taken the Vueling approach. Berlin is not a powerhouse in Germany, but still it is the capital, a growing destination and "trendy" (like Barcelona is). It is (or was) also somehow misregarded by LH. It has a great location for Eastern Europe. They could have expanded to connect Eastern Europe/Russia/Scandinavia to Western/Southern Europe (look at VY now with +100 destinations from BCN!)... for instance the traffic that wants to go from Nizhny Novgorod to Alicante or Goteborg to Nice. They could have a distinctive advantage there compared to LH, and being Berlin a destination by itself in Europe.

I wonder why they even fly long-haul.


User currently offlinesofianec From Germany, joined Aug 2007, 240 posts, RR: 2
Reply 18, posted (1 year 6 months 2 days 20 hours ago) and read 2161 times:

Quoting SCQ83 (Reply 17):
who would fly Germany-Spain for business other than LH (and even IB) to connect in TXL with AB of all places and companies?

I would assume many people would. Lufthansa is actually too expensive on many routes. For example between SOF and FRA or MUC they are 2 1/2 times more expensive than FB and that is always. They do have the frequencies but many companies are cutting and demanding to fly the cheapest option. AB have made their calculations and see demand for MAD-TXL. They need to start making Berlin a true hub for themselves now rather than later.

A network of business destinations out of BER is a MUST for AB it's their hub after all. BER is an excellent X point for flights from East (Russia), even though geographically not optimal, traditionally and logically positioned to attract a decent traffic + growing O/D.

---

[Edited 2013-04-02 09:05:29]


A350WARP
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1554 posts, RR: 2
Reply 19, posted (1 year 6 months 2 days 19 hours ago) and read 2094 times:

I think one of the problems with AB arise from all the mergers it took to get to where AB is today.

We have the original USA owned Air Berlin, then we have Deutsche BA, Germania, LTU, Niki, plus partnerships with TUIfly and it the foreign owners ESAS (Pegasus Airlines in Turkey) and Etihad.

Each merger brought its own business model, planes, people, bases etc. Lots of excess baggage.

Also the name -- why Berlin? Its largest operation still remains Dusseldorf, and they have flight bases in 10 other German cities also. I think they should have a more generic name, unless if they indeed will close everything and really only focus on a true Berlin home.

AB is like goulash - everything mixed together without clarity as to ingredients(the product and business plan).


User currently offlineSCQ83 From United States of America, joined Oct 2012, 958 posts, RR: 0
Reply 20, posted (1 year 6 months 2 days 19 hours ago) and read 2084 times:

Quoting mercure1 (Reply 15):
Everyone left with this confused situation of Air Berlin trying to be so many different things under one label.

I don't think the problem is to do many things with one label... the problem is that they try to do many things without being that big and without standing out in anything first. For instance, BA carries business travellers from LHR to JFK and leisure travellers from LGW to MCO.

Quoting mercure1 (Reply 19):
Also the name -- why Berlin? Its largest operation still remains Dusseldorf, and they have flight bases in 10 other German cities also. I think they should have a more generic name, unless if they indeed will close everything and really only focus on a true Berlin home.

I agree that Air Berlin can be a bit misleading name, but it is probably the least of their problems. Look at Norwegian and their European expansion (i.e. LGW or ALC bases).


User currently offliner2rho From Germany, joined Feb 2007, 2641 posts, RR: 1
Reply 21, posted (1 year 6 months 2 days 1 hour ago) and read 1856 times:

Quoting sofianec (Reply 18):
They need to start making Berlin a true hub for themselves now rather than later.

Problem is, they can't. Not until the new BER opens, and noone knows when that will happen. 2014? 2015? Not even the airport responsibles know. Should AB keep burning cash until it opens at a TBD date? I would not base my business plan on that.
Instead, AB should resort to a plan B and concentrate around DUS and VIE, with a secondary focus on STR and HAM, forgetting about BER for the time being. They can always reconsider when the new airport opens, but they should try to make money today, and money can be made out of DUS and VIE IMO.


Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
BA Record Loss, More Job Cuts posted Fri Nov 6 2009 06:45:03 by Hardiwv
AA Plans More Job Cuts posted Mon Aug 31 2009 22:54:08 by LAXintl
Delta Plans More Job Cuts posted Thu Aug 19 2004 15:21:17 by Jalto27R
Air Berlin Facing Major Job Cuts? posted Tue Nov 13 2012 11:57:20 by Tobias2702
Manitoba Taking Air Canada To Court Over Job Cuts posted Thu Oct 30 2008 14:20:03 by CB97
Air Canada Parent Posts Loss, Plans Job Cuts posted Sat Feb 11 2006 01:31:03 by KarlB737
Air NZ Warns Of Further Job Cuts posted Wed Nov 30 2005 11:57:36 by 777ER
Indy Air Plans Job Cuts posted Mon Jan 10 2005 20:21:04 by TOLtommy
More Air Berlin Routes At MAN? posted Thu Oct 7 2004 21:43:43 by David_itl
Air Canada Job Cuts Coming posted Thu Feb 6 2003 14:19:15 by Dripstick