Gonzalo
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Air Berlin Selling Eight NB Aricraft To Cut Debt

Fri Aug 17, 2012 12:28 pm

This will have an impact in the fleet capacity... is this a sign of some degree of desperation ??

http://atwonline.com/news/other-headlines/

Thoughts ?

Rgds.
G.
Gear Up!!: DC-3 / EMB-110 / Fairchild-227 / Ab318-19-20-21 / B732 / B763 / B789
 
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Semaex
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RE: Air Berlin Selling Eight NB Aricraft To Cut Debt

Fri Aug 17, 2012 12:42 pm

Read about it in a germany online-newspaper too. It does seem like a desperate move. What is really getting to AB is that the new BER airport is delayed already and the prospects for its opening in March 2013 are by all means too ambitious. Figures suggest that AB loses as much as 20€m each month due to the constraints at TXL when they could expand at BER.
But that's not all that amounts to the equation that AB is facing serious extential problems. They are struggeling against their big german rival LH in the top segment and LCCs in their leasure market and it doesn't seem like Oneworld or EY are helping out either, since they are too busy trying to beat each other up over who is the real "partner" for AB.

I keep saying that AB should have a look at how HG is running its business, as they are a very attractive airline both for pax and investors.
// You know you're an aviation enthusiast when you look at your neighbour's cars and think about fleet commonality.
 
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ERJ170
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RE: Air Berlin Selling Eight NB Aricraft To Cut Debt

Fri Aug 17, 2012 1:15 pm

Hello Air Berlin,

Why not contact RDU and get the subsidy for the FRA flight and at least make some break even, but more likely, positive cash flow? And then you can connect to AA flights for connections.. Sheesh! Is it really that hard to do these things?
Aiming High and going far..
 
LOWS
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RE: Air Berlin Selling Eight NB Aricraft To Cut Debt

Fri Aug 17, 2012 1:49 pm

How about the two airlines figure out what kind of airline they want to be?

Are they an LCC?

The prices and service seem like it. I've heard people compare them to 4U.

Are they a network carrier?

Are they a leisure carrier?
Flying SZG-HRG (amongst many others) sure makes them seem like it.
 
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Semaex
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RE: Air Berlin Selling Eight NB Aricraft To Cut Debt

Fri Aug 17, 2012 2:01 pm

Quoting erj170 (Reply 2):
Why not contact RDU and get the subsidy for the FRA flight and at least make some break even, but more likely, positive cash flow? And then you can connect to AA flights for connections.. Sheesh! Is it really that hard to do these things?

Yes, very hard.
Why exactly should AB receive subsidies, and from who? The government aka tax payer? It's not like this is an aviation-friendly nation I'm living in, considering all the public movement against airport expansion, night flights and so on.
And in times where billions flow to aid other nations it'll be quite difficult to convince the public that an airline run by a CEO who is thought to be the personified evil-head-of-a-multimillion-corporation should receive subsidies when there's still LH or FR around the corner, depending on how you want to travel.
And what exactly is AA going to do about it? Feeding one FRA-bound 767 a day surely isn't enough to turn an airline profitable. Let alone the fact that AB is not making a lot of money at FRA in the first place, which is rather obvious considering the competition.

They could be doing very well ex CGN and even more so at BER, if only the enviromental conditions weren't so hostile at this moment. I wish EY would support AB more than it does now.
// You know you're an aviation enthusiast when you look at your neighbour's cars and think about fleet commonality.
 
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ERJ170
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RE: Air Berlin Selling Eight NB Aricraft To Cut Debt

Fri Aug 17, 2012 2:51 pm

Quoting Semaex (Reply 4):
Yes, very hard.
Why exactly should AB receive subsidies, and from who? The government aka tax payer? It's not like this is an aviation-friendly nation I'm living in, considering all the public movement against airport expansion, night flights and so on.
And in times where billions flow to aid other nations it'll be quite difficult to convince the public that an airline run by a CEO who is thought to be the personified evil-head-of-a-multimillion-corporation should receive subsidies when there's still LH or FR around the corner, depending on how you want to travel.

The subsidies are coming from Research Triangle Regional Partnership in Raleigh, NC. It wouldn't come from the taxpayers of Germany or from the taxpayers of the US/North Carolina.. it is coming from a private organization that is composed of over 50 companies that have pooled money into an account for the specific purpose of getting a non-stop flight to Frankfurt (and Paris). But AB could easily just contact RTRP and get into discussions about receiving the subsidy and starting the flight. AA accessed if for the LHR flight and now don't even need the subsidy for it (from last I heard, the flight goes out profitable on it's own merit). I don't see why they would not be interested in having a profitable flight..
Aiming High and going far..
 
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Semaex
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RE: Air Berlin Selling Eight NB Aricraft To Cut Debt

Fri Aug 17, 2012 3:11 pm

If such a pool exists and free money is there to take, then why wouldn't LH have done it already? After all, FRA is their prime hub, nothing easier than starting a new long-haul from there. Piece of cake.
But if LH is not going to do it, then I trust you do understand that AB will not even think about it. Not ex FRA.
// You know you're an aviation enthusiast when you look at your neighbour's cars and think about fleet commonality.
 
flyingalex
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RE: Air Berlin Selling Eight NB Aricraft To Cut Debt

Fri Aug 17, 2012 8:12 pm

Quoting erj170 (Reply 5):
The subsidies are coming from Research Triangle Regional Partnership in Raleigh, NC. It wouldn't come from the taxpayers of Germany or from the taxpayers of the US/North Carolina.. it is coming from a private organization that is composed of over 50 companies that have pooled money into an account for the specific purpose of getting a non-stop flight to Frankfurt (and Paris). But AB could easily just contact RTRP and get into discussions about receiving the subsidy and starting the flight. AA accessed if for the LHR flight and now don't even need the subsidy for it (from last I heard, the flight goes out profitable on it's own merit). I don't see why they would not be interested in having a profitable flight..
Quoting Semaex (Reply 6):
If such a pool exists and free money is there to take, then why wouldn't LH have done it already? After all, FRA is their prime hub, nothing easier than starting a new long-haul from there. Piece of cake.
But if LH is not going to do it, then I trust you do understand that AB will not even think about it. Not ex FRA.

As I understand it, AA flies that route on a 767, which indicates that there is some demand, but not massive amounts of it. Neither LH nor AB have an aircraft which is suited for long, thin routes, with their smallest longhaul aircraft being the A333 (LH) and A332 (AB). Condor might be able to make it work, but it's a bit far off their business model. A UA/CO 757 might be ideal in terms of capacity, but it would not have sufficient range.

This might be a good route for a 787.
Public service announcement: "It's" = "it is". To indicate posession, write "its." Looks wrong, but it's correct grammar
 
LTU330
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RE: Air Berlin Selling Eight NB Aricraft To Cut Debt

Sat Aug 18, 2012 7:40 am

How is this a desperate move ? It is part of the "Size and Shape" plan. Increasing utilisation of the fleet means that the number of Aircraft can be reduced. The Aircraft that are leaving the fleet at the moment had high leasing costs. Air Berlin are pulling out of many loss making airports and therefore the fleet needs to shrink anyway. Some of the new Aircraft due to join the fleet also had high leasing agreements. It makes no sense to take these aircraft at the moment, and Airlines that desperately need the capacity can pick them off, and Air Berlin makes a small amount by letting the desperate Airlines take the early delivery slots aswell.

Just to add to this. With the collapse of OLT Express, several older Aircraft are already on their way back to Air Berlin aswell.

[Edited 2012-08-18 00:43:58]
 
LV
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RE: Air Berlin Selling Eight NB Aricraft To Cut Debt

Sat Aug 18, 2012 8:16 am

The article no longer seems to be on air transport world. What kinds of planes is AB selling and how many?
 
Gonzalo
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RE: Air Berlin Selling Eight NB Aricraft To Cut Debt

Sat Aug 18, 2012 2:11 pm

Quoting LV (Reply 9):
What kinds of planes is AB selling and how many?

It is in the title. Narrow Bodies, Eight.

Rgds.
G.
Gear Up!!: DC-3 / EMB-110 / Fairchild-227 / Ab318-19-20-21 / B732 / B763 / B789
 
LV
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RE: Air Berlin Selling Eight NB Aricraft To Cut Debt

Sat Aug 18, 2012 5:36 pm

Quoting Gonzalo (Reply 10):
It is in the title. Narrow Bodies, Eight

I admit I was half asleep when I posted so I missed "eight" in the title but narrow bodies is not a type. 320, 319, 738, etc are types.
 
Gonzalo
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RE: Air Berlin Selling Eight NB Aricraft To Cut Debt

Sat Aug 18, 2012 6:32 pm

Quoting LV (Reply 11):
narrow bodies is not a type. 320, 319, 738, etc are types.

Are you still sleeping ?     Just a joke... but you asked "What kinds of planes..", not "what type".... They have A319, A320, 737-700 and 800.., maybe they will sell the older frames trying to keep the fleet age younger, maybe the newest looking for more cash... I really don't know... if someone else can help with more accurate info...


Rgds.

G.
Gear Up!!: DC-3 / EMB-110 / Fairchild-227 / Ab318-19-20-21 / B732 / B763 / B789
 
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Stitch
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RE: Air Berlin Selling Eight NB Aricraft To Cut Debt

Sat Aug 18, 2012 7:36 pm

Per this article by Reuters, they are selling owned planes, not leased. Everyone else seems to be using the same body text.

Airfleets.net shows most of AB's fleet being owned, when AB themselves state that the bulk of their fleet is leased, so I can't tell what models might be leaving.
 
flyingalex
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RE: Air Berlin Selling Eight NB Aricraft To Cut Debt

Sat Aug 18, 2012 8:01 pm

Are these going to be outright sales, or sell-and-lease-back transactions? The latter are a popular instrument for raising cash quickly, but they can be a sign of deep problems with the business.
Public service announcement: "It's" = "it is". To indicate posession, write "its." Looks wrong, but it's correct grammar
 
chieft
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RE: Air Berlin Selling Eight NB Aricraft To Cut Debt

Sun Aug 19, 2012 12:37 pm

AB has never made substantial profit in the past 10 years, except for 1 or 2 years.

A huge expansion program, a hybrid business model, which the market does not understand (is AB a legacy or a LC airline? or something else?), difficult procurements, especially LTU - which is obviosuly still a part of the huge losses and which is not readily integrated in AB at all, a mixed fleet with different sub-fleets and so on, and so on.

How shall this airline every make a profit? AB does all the things you learn in aviation management courses, that you should not do it if you want to be a profitable airline.
Aircraft are marginal costs with wings.
 
chieft
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RE: Air Berlin Selling Eight NB Aricraft To Cut Debt

Sun Aug 19, 2012 12:41 pm

Quoting flyingalex (Reply 14):

Are these going to be outright sales, or sell-and-lease-back transactions? The latter are a popular instrument for raising cash quickly, but they can be a sign of deep problems with the business.

The article says "By the end of June, AB reduced its fleet to 152 from 165 in the year-ago period. By year end, its fleet will be reduced to 144 aircraft." So it is a true sale, no SLB-deal
Aircraft are marginal costs with wings.

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