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LAXintl
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Air Berlin Sells Frequent Flyer Program

Tue Dec 18, 2012 8:59 pm

Loss making Air Berlin has sold 70% stake in its Topbonus frequent flyer program to Etihad for €184.4 million.

With the deal Topbonus would be spun off as a separate company with focus on selling points to credit card companies, hotels and retailers and extend outside the air-travel industry.
Per Etihad they intend to make Topbonus into a "global loyalty management platform".
Topbonus currently has 3.1mil members and will be merged with EYs own 1.8mil member program.

As part of the deal AB will get also get 150 million euros in debt financing arranged by Etihad and provided by HSBC and Commerzbank.

Lastly Air Berlin CEO say with the sale, the carrier would now record a profit for 2012 erasing previously estimated €145 million loss for the year.

Story:
http://www.bloomberg.com/news/2012-1...ram-to-etihad-for-150-million.html

=
From the desert to the sea, to all of Southern California
 
rutankrd
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RE: Air Berlin Sells Frequent Flyer Program

Tue Dec 18, 2012 9:19 pm

Right so what do they bring to Oneworld now ?

Frequent flyer programme - Sold

Good feed and connections with other OW carriers in German markets or elsewhere within Europe- Not really.

Beyond Europe little bit with AA but not much else and anyway most of their long haul remains primarily leisure oriented, as does much of the European network.

Now even heavier indebted to Etihad so we know who will be pulling strings

Ever closer relationships and deeper codeshare arrangements with AF/KL than with any OW carrier.

Can they really remain in OW !
 
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LAXintl
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RE: Air Berlin Sells Frequent Flyer Program

Tue Dec 18, 2012 10:22 pm

Etihad must really see something in Air Berlin as they keep getting deeper and deeper financially tangled.

So far from what I can figure:

2011 - initial 3% stake in AB = €?
December 2011 - boost stake in AB to 29% = €72.9m
June 2012 - Provides AB loan = €162.9m
December 2012 - Buy 70% of Topbonus = €184.4m
December 2012 - Provide financing = €150m


An for AB, yes they tie their existence and future ever closer to the wishes of Etihad.
From the desert to the sea, to all of Southern California
 
MAH4546
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RE: Air Berlin Sells Frequent Flyer Program

Tue Dec 18, 2012 10:26 pm

Quoting rutankrd (Reply 1):
Frequent flyer programme - Sold

And? Airlines sometimes outsource their FF program. AA considered doing it a few years ago. Air Canada did it in 2002 - Aeroplan is not owned by AA.

It being sold doesn't mean it ceases to exist - an AB FF won't know the difference.
a.
 
rojo
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RE: Air Berlin Sells Frequent Flyer Program

Tue Dec 18, 2012 10:37 pm

Another airline making the huge mistake of selling its FF Program (the only valuable asset most airlines have)... but it is AB, they just can't figure out how to make money. Selling Top Bonus just to record a profit in 2012 will not help them to become profitable in the years to come. What will they do once they ran out of assets? Germany does not have Chapter 11...

Quoting mah4546 (Reply 3):
. AA considered doing it a few years ago

And they realized what a huge mistake it would have been and did not proceed with the sale.
 
aloges
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RE: Air Berlin Sells Frequent Flyer Program

Tue Dec 18, 2012 10:38 pm

Quoting LAXintl (Thread starter):
Per Etihad they intend to make Topbonus into a "global loyalty management platform".

They could start by giving it a less ridiculous name... and look for it anywhere but in Germany, where the biggest loyalty programme is called "Payback". I kid you not.
Don't cry because it's over, smile because it happened.
 
CYatUK
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RE: Air Berlin Sells Frequent Flyer Program

Wed Dec 19, 2012 7:20 am

[quote=rutankrd,reply=1]Good feed and connections with other OW carriers in German markets or elsewhere within Europe- Not really.

Could the lack of a large hub be blamed for this? i.e. could/will the situation change once BER opens?
CY@Uk
 
twa@fra
Posts: 150
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RE: Air Berlin Sells Frequent Flyer Program

Wed Dec 19, 2012 8:02 am

I would say the benefit of AB in OneWorld is not any HUB, but to have a local client base and choice for OW members in German to fly OW e.g. within Germany or certain Europe routes which before they couldn’t.
For example somebody based in DUS and is flying a few times a year to HAM/TXL/MUC and some intercontinental flights. If he want to give his business to one Alliance, there had been only Star in the past, but now OW become an option.
 
captainmeeerkat
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RE: Air Berlin Sells Frequent Flyer Program

Wed Dec 19, 2012 8:16 am

What are the chances that EY will start their own alliance in the near future - their strategy of late seems to imply so?

A good move in my opinion to try and compete with their bigger and more aggressive neighbour.
my luggage is better travelled than me!
 
PanHAM
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RE: Air Berlin Sells Frequent Flyer Program

Wed Dec 19, 2012 9:08 am

Quoting CYatUK (Reply 6):
Could the lack of a large hub be blamed for this? i.e. could/will the situation change once BER opens?

Not really. BER draws a lot of low yield traffic but rather little high yield. The location is remote.

DUS is a far better located hub with a much larger catchment area. But, whatever AB does, LH will spit into their spoup and going into bed with Etihad makes them even more an enemy to LH.
powered by Eierlikör
 
ushermittwoch
Posts: 2537
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RE: Air Berlin Sells Frequent Flyer Program

Wed Dec 19, 2012 10:26 am

Oh, well this is kinda disappointing. I was hoping that Topbonus would be incorporated into FlyingBlue...   
Where have all the tri-jets gone...
 
r2rho
Posts: 2475
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RE: Air Berlin Sells Frequent Flyer Program

Wed Dec 19, 2012 2:52 pm

Quoting LAXintl (Thread starter):
70% stake in its Topbonus frequent flyer program to Etihad for €184.4 million.

The high price paid for this small and relatively unimportant FF program is, in fact, an indirect cash injection by EY.

Quoting LAXintl (Thread starter):
AB will get also get 150 million euros in debt financing arranged by Etihad and provided by HSBC and Commerzbank.

EY is clearly very serious about trying to turn around AB. Now... how much longer will AB remain in OW?   

Quoting LAXintl (Thread starter):
the carrier would now record a profit for 2012 erasing previously estimated €145 million loss for the year.

A "fake" financial profit as they will still have operating losses. But it will look nice on the annual report.

Quoting CYatUK (Reply 6):
could/will the situation change once BER opens?

BER is certainly a necessary, but not sufficient, condition for AB to be profitable.
 
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LAXintl
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RE: Air Berlin Sells Frequent Flyer Program

Wed Dec 19, 2012 5:35 pm

I think it will be interesting that if Air Berlin stays in OW, its FF'er program, database and commercial information will be primarily owned by an outsider, and one that is fierce competitor with new OW member QR.

I cant imagine QR would be too enthused to do business with AB if much of the info and earnings go back into its Gulf rival pockets.

But personally, I see EY having different ideas for AB that eventually don't include OW.
From the desert to the sea, to all of Southern California
 
r2rho
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RE: Air Berlin Sells Frequent Flyer Program

Thu Dec 20, 2012 12:21 pm

...and in related news, EY and AB have extended their codeshare agreement to an additional 5 destinations in East Asia: CTU, PEK, PVG, NRT, NGO:

(in German):
http://www.airliners.de/management/m...d-etihad-bauen-codeshare-aus/28719
 
mozart
Posts: 2047
Joined: Thu Aug 14, 2003 12:21 am

RE: Air Berlin Sells Frequent Flyer Program

Thu Dec 20, 2012 9:42 pm

Somewhere above it says that topbonus will be "merged into Etihad's own FFP". So Air Berlin will no longer have its "own" FFP? Use Etihad instead? So if I have Gold status on Etihad that will then also be my status on AB, and by extension also with other OW carriers? Too good to be true...
 
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LAXintl
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RE: Air Berlin Sells Frequent Flyer Program

Fri Dec 21, 2012 1:27 am

From what I read, Topbonus will now become the combined program used by Etihad - Air Berlin - Air Seychelles.

Sounds like Etihad also will work to develop broader program partnerships including additional airline members.
From the desert to the sea, to all of Southern California
 
dcann40
Posts: 129
Joined: Wed Sep 12, 2012 2:38 pm

RE: Air Berlin Sells Frequent Flyer Program

Fri Dec 21, 2012 5:47 am

Quoting LAXintl (Reply 15):
From what I read, Topbonus will now become the combined program used by Etihad - Air Berlin - Air Seychelles.

Sounds like Etihad also will work to develop broader program partnerships including additional airline members.

Etihad is going into the loyalty program business.

Etihad Acquires Air Berlin's TopBonus Frequent Flyer Program

Quote:
...The deal is seen as the first step in the creation of a new global loyalty management company by Etihad.

...
 
ushermittwoch
Posts: 2537
Joined: Fri Jan 09, 2004 10:18 pm

RE: Air Berlin Sells Frequent Flyer Program

Fri Dec 21, 2012 8:25 am

Quoting Mozart (Reply 14):
Somewhere above it says that topbonus will be "merged into Etihad's own FFP". So Air Berlin will no longer have its "own" FFP? Use Etihad instead? So if I have Gold status on Etihad that will then also be my status on AB, and by extension also with other OW carriers? Too good to be true...

Sounds more like a definitive and soon exit from OW.

This does kind annoy me though, since I just burned a lot of AB miles on intra-European flights, had I known that I could get on some EY flights soon, I would have held out. Oh well, that's life.

And since Air Seychelles will also be onboard, it looks like they might actually all join SkyTeam soon, since Air Seychelles has traditionally had very strong ties to Air France.
Where have all the tri-jets gone...
 
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LAXintl
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RE: Air Berlin Sells Frequent Flyer Program

Fri Jan 04, 2013 9:57 pm

Some board shakeups.

Niki Lauda is leaving the board of directors. He says he wants to devote more time to his Mercedes formula one team.
To replace him a former BMI executive will be brought onboard.


story:
http://www.usnews.com/news/sports/ar...-berlin-board-to-concentrate-on-f1

=
From the desert to the sea, to all of Southern California
 
brilondon
Posts: 3021
Joined: Sun Aug 21, 2005 6:56 am

RE: Air Berlin Sells Frequent Flyer Program

Fri Jan 04, 2013 10:10 pm

Quoting r2rho (Reply 11):
A "fake" financial profit as they will still have operating losses. But it will look nice on the annual report.

Nothing fake about it. You sell an asset and realize the money as income. Just like if you held $10,000 dollars in stock and sold it, for $12,000. You would not say it was fake. You would report it as a $10,000 increase in income and $2,000 in capital gains, increasing your annualized profit from all sources as $12,000. This would be a one time only profit and you better get your house in order to maintain that profit so the share holders will still see the equity they have in the company as being a good hold.
Rush for ever; Yankees all the way!!
 
dcann40
Posts: 129
Joined: Wed Sep 12, 2012 2:38 pm

RE: Air Berlin Sells Frequent Flyer Program

Sat Jan 05, 2013 5:43 am

Quoting ushermittwoch (Reply 17):
Sounds more like a definitive and soon exit from OW.

I don´t think this alone necessitates an exit from OW.

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