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RJ100
Topic Author
Posts: 3904
Joined: Wed Nov 22, 2000 1:37 am

Air Berlin In Bad Financial Shape?

Wed Apr 12, 2006 5:54 pm

Hello all

For years we have heard that Air Berlin would work "profitable" (although no official results were released).

Today "Financial Times Germany" reports a 2005 loss for Air Berlin of 115.9 mio. Euros. This is a quite shocking result in my opinion. I did not expect them to be in this bad condition.

They will sell a lot of stocks soon (which will bring them a lot of money) but are they really sustainable in the long term?

What's your opinion on that?

Regards,
RJ100

[Edited 2006-04-12 10:54:37]
none
 
Ruscoe
Posts: 1748
Joined: Sun Aug 22, 1999 5:41 pm

RE: Air Berlin In Bad Financial Shape?

Wed Apr 12, 2006 6:05 pm

Didn't they recently order new aircraft.
Can't be in too bad a position or would not have got the finance!

Ruscoe
 
pelican
Posts: 2431
Joined: Mon Apr 05, 2004 9:51 pm

RE: Air Berlin In Bad Financial Shape?

Wed Apr 12, 2006 6:09 pm

Quoting RJ100 (Thread starter):

Today "Financial Times Germany" reports a 2005 loss for Air Berlin of 115.9 mio. Euros. This is a quite shocking result in my opinion. I did not expect them to be in this bad condition.

That sounds really bad. Do they state the source of the loss? Because I can't imagine someone buying shares from an airline with an unprofitable operative business. Maybe the costs of buying new planes?

However this could be another hint of FL Group's interest to invest in AB.

pelican

[Edited 2006-04-12 11:10:20]
 
aerosol
Posts: 500
Joined: Mon Oct 23, 2000 10:31 pm

RE: Air Berlin In Bad Financial Shape?

Wed Apr 12, 2006 6:26 pm

With the new 99 Euro Pricing of LH I guess the future of Air Berlin is not as good as it it used to be.

Another thing is that I do not know if their IPO is the best idea.
 
TriStar500
Posts: 4427
Joined: Thu Nov 04, 1999 9:50 pm

RE: Air Berlin In Bad Financial Shape?

Wed Apr 12, 2006 7:15 pm

You cannot reliably deduct the financial shape of a company from a single year's financial report. Therefore one should be hesitant to come up with sensationalist conclusions if one is not competent in business economics.

Leave that to tabloid newspapers.
Homer: Facts are meaningless. You could use facts to prove anything that's even remotely true!
 
PanHAM
Posts: 9719
Joined: Fri May 06, 2005 6:44 pm

RE: Air Berlin In Bad Financial Shape?

Wed Apr 12, 2006 7:41 pm

The loss is the result of clearing the books for the IPO. German tax and accounting laws give you the opportunity to hide profits and losses to a certain extend, you can carry them on the books to off-set with future profits and losses.

Before the details of the IPO are not published (and we will see that shortly since they are really pushing it now) there should be no speculation over the shape the company is in. Obviously, they need fresh money to cintinue their market expansion. EZY and FR have been on that road, why should'nt AB follow them?

I think that the goodwill in that company is more important than the previous performance, which cannot have been so bad when you consider that they have stemmed a remarkable expansion over the past couple of years without really dipping deep into the red ink.



.
Was Erlauben Erdogan!!!
 
StarFlyer
Posts: 929
Joined: Thu Sep 12, 2002 10:07 am

RE: Air Berlin In Bad Financial Shape?

Wed Apr 12, 2006 8:04 pm

Operative (EBIT) loss is only EUR 5m. The loss of EUR 116m is partly due to a change in the accounting system (to IFRS) which resulted in EUR 45m having to be paid in taxes. A further EUR 50m have been caused by the rise of the USD, which results in higher interest for debt in foreign currencíes.

I wonder why they really need to do an IPO this year - they will be trading a substantial discounts due to the weak figures. Do they really need the capital that urgently? Its not like they have to pay cash for the new aircraft? I suppose with rising oil prices they expect the IPO climate to just become rougher and rougher.
Yours truly - StarFlyer
 
RJ100
Topic Author
Posts: 3904
Joined: Wed Nov 22, 2000 1:37 am

RE: Air Berlin In Bad Financial Shape?

Wed Apr 12, 2006 8:21 pm

I don't think it is sensationalism. I am just surprised to see such a loss. And I believe future shareholders do not care about differences between operational losses and losses due to "one time costs". A loss is a loss and AB's results are very disappointing in my opinion.

Good luck to them though.

RJ100
none
 
pelican
Posts: 2431
Joined: Mon Apr 05, 2004 9:51 pm

RE: Air Berlin In Bad Financial Shape?

Wed Apr 12, 2006 8:23 pm

Quoting PanHAM (Reply 5):
Operative (EBIT) loss is only EUR 5m. The loss of EUR 116m is partly due to a change in the accounting system (to IFRS) which resulted in EUR 45m having to be paid in taxes. A further EUR 50m have been caused by the rise of the USD, which results in higher interest for debt in foreign currenc�es.

Thanks, that explains a lot.

Quoting StarFlyer (Reply 6):
I wonder why they really need to do an IPO this year - they will be trading a substantial discounts due to the weak figures. Do they really need the capital that urgently?[...] I suppose with rising oil prices they expect the IPO climate to just become rougher and rougher.

Just look on Wacker Chemie, the climate for an IPO seems to be really good, so I guess they want to seize their chance.

pelican
 
StarFlyer
Posts: 929
Joined: Thu Sep 12, 2002 10:07 am

RE: Air Berlin In Bad Financial Shape?

Wed Apr 12, 2006 9:26 pm

Quoting Pelican (Reply 8):
Just look on Wacker Chemie, the climate for an IPO seems to be really good, so I guess they want to seize their chance.

You are right, the general climate is good. But Wacker is a highly profitable entity in a niche market, while AB is making losses in a very competitive environment. I wouldn't recommend buying those shares!
Yours truly - StarFlyer
 
7LBAC111
Posts: 2427
Joined: Sun Jul 18, 2004 9:17 am

RE: Air Berlin In Bad Financial Shape?

Wed Apr 12, 2006 9:35 pm

Quoting RJ100 (Reply 7):
And I believe future shareholders do not care about differences between operational losses and losses due to "one time costs". A loss is a loss and AB's results are very disappointing in my opinion.

I disagree. I think any serious potential investor will look at long term performance and future predictions before investing, rather than saying no to a 'one-off' such as this.

7L
Debate is what you put on de hook when you want to catch de fish.
 
Sabena332
Posts: 14938
Joined: Wed May 09, 2001 3:57 am

RE: Air Berlin In Bad Financial Shape?

Wed Apr 12, 2006 9:42 pm

Sad news but no problem, I will simply cut the salaries of my employees.

Signed,

Joachim Hunold
NZ1's mother is a disgusting crack-whore and his father is a worthless alcoholic!
 
pelican
Posts: 2431
Joined: Mon Apr 05, 2004 9:51 pm

RE: Air Berlin In Bad Financial Shape?

Wed Apr 12, 2006 9:48 pm

Quoting StarFlyer (Reply 9):

You are right, the general climate is good. But Wacker is a highly profitable entity in a niche market, while AB is making losses in a very competitive environment. I wouldn't recommend buying those shares!

I wouldn't buy them either.

Quoting Sabena332 (Reply 11):
ad news but no problem, I will simply cut the salaries of my employees.

No, that's not the way Mr. Hunold is doing business. He would just extend the average working time and threaten everybody who thinks about getting ill.

pelican
 
Johnny
Posts: 812
Joined: Tue Jan 15, 2008 1:38 am

RE: Air Berlin In Bad Financial Shape?

Wed Apr 12, 2006 10:08 pm

Air Berlin is well know as an airline which pays around 75 percent of the average salaries other german airlines pay...

Isn´that enough..?  Wink

Johnny  Smile

p.s. There is a life after Air Berlin - and that could start very soon!
 
boeingbus
Posts: 1545
Joined: Sat May 29, 2004 12:37 am

RE: Air Berlin In Bad Financial Shape?

Wed Apr 12, 2006 10:57 pm

I am probably going to get slammed for this... Boeing didn't think they could afford more planes. Hence, this is one of the prime reason Air Berlin went for the A320.

I know very little of Air Berlin but I would imagine it's a tough environment out in Europe when you have EasyJet, Ryanair, and of course LH.

Cheers!
Airbus or Boeing - it's all good to me!
 
StarFlyer
Posts: 929
Joined: Thu Sep 12, 2002 10:07 am

RE: Air Berlin In Bad Financial Shape?

Thu Apr 13, 2006 1:40 am

Quoting BoeingBus (Reply 14):
Boeing didn't think they could afford more planes. Hence, this is one of the prime reason Air Berlin went for the A320.

Yes, that's probably it. And Ryanair ordering hundreds of 737s was a much more solvent customer. Get real!
Yours truly - StarFlyer
 
Icelandair
Posts: 56
Joined: Wed Jun 01, 2005 4:14 pm

RE: Air Berlin In Bad Financial Shape?

Thu Apr 13, 2006 7:16 am

Quoting Sabena332 (Reply 11):
Sad news but no problem, I will simply cut the salaries of my employees.

Signed,

Joachim Hunold

even further .... ?
http://www.flugbegleiter.net/
 
hz747300
Posts: 2419
Joined: Thu Mar 11, 2004 11:38 pm

RE: Air Berlin In Bad Financial Shape?

Thu Apr 13, 2006 7:52 am

Quoting TriStar500 (Reply 4):
You cannot reliably deduct the financial shape of a company from a single year's financial report. Therefore one should be hesitant to come up with sensationalist conclusions if one is not competent in business economics.

Exactly, but it makes better headlines to dump on the company just before its IPO. What it does do it puts them under a more watchful eye!
Keep on truckin'...
 
andaman
Posts: 2271
Joined: Wed Oct 05, 2005 5:29 am

RE: Air Berlin In Bad Financial Shape?

Thu Apr 13, 2006 11:37 am

I really hope they will fly in June still... will try them for the first time then, from Milan/Bergamo to Helsinki. So far I have heard only good things about AB.
Chinese cookie in SFO: "You're doomed to a life of forever travelling abroad and to be able to afford it!"
 
User avatar
clickhappy
Posts: 9175
Joined: Thu Sep 13, 2001 12:10 pm

RE: Air Berlin In Bad Financial Shape?

Thu Apr 13, 2006 1:39 pm

Actually "BoeingBus" has it correct. I had a long, off the record, talk with a Boeing VP, who has since been relieved, about Air Berlin. They (Boeing) did not want Air Berlin to expand so quickly, and did not offer them such a deal, so they went Airbus.

As a staff member of an aviation magazine with worldwide circulation I am happy to put my info up against yours, but you have to come at me with actual sources and discussions, not internet forum gibberish.

Royal
 
cpairDC10
Posts: 76
Joined: Fri Feb 24, 2006 2:56 am

RE: Air Berlin In Bad Financial Shape?

Thu Apr 13, 2006 2:54 pm

They have bought a heep load of aircraft from Airbus and from what I heard they have done about 30% of the financing through their own funds. They want to sought the rest out through the jump in the stock markets......for all you doubters out there that wont buy the shares, then thats more for me !!!
They are not in finacial trouble, if they were then they wouldnt be allowed on the stock market, they wouldnt get the finance for the aircraft.
They are also backed by Mr Niki Lauda who apparently recieved a shit load of money for his sale of Lauda air.

Just my thoughts......
 
TriStar500
Posts: 4427
Joined: Thu Nov 04, 1999 9:50 pm

RE: Air Berlin In Bad Financial Shape?

Thu Apr 13, 2006 3:00 pm

Quoting Andaman (Reply 18):
I really hope they will fly in June still... will try them for the first time then, from Milan/Bergamo to Helsinki. So far I have heard only good things about AB.

Get real please. Just because they are showing some negative (but not catastrophic) figures at the moment, they are not going belly up anytime soon. Enjoy your flight and experience some excellent value for money on your first AB trip!  Smile
Homer: Facts are meaningless. You could use facts to prove anything that's even remotely true!
 
semsem
Posts: 1621
Joined: Fri Jul 29, 2005 1:06 am

RE: Air Berlin In Bad Financial Shape?

Thu Apr 13, 2006 3:40 pm

You must look at the cash flow from operations, not net income / loss. Add back non cash depreciation to the net loss.
 
pelican
Posts: 2431
Joined: Mon Apr 05, 2004 9:51 pm

RE: Air Berlin In Bad Financial Shape?

Thu Apr 13, 2006 5:53 pm

Quoting Clickhappy (Reply 19):
Actually "BoeingBus" has it correct. I had a long, off the record, talk with a Boeing VP, who has since been relieved, about Air Berlin. They (Boeing) did not want Air Berlin to expand so quickly,

Sounds like a bad looser or a really stupid move from Boeing. AB is not a newcomer in the business. And as CPairDC10 already said, the legal requirements for an IPO would it make impossible for a company in a bad financial shape.
Analysts predict a profit already for this year.

Quoting CPairDC10 (Reply 20):
for all you doubters out there that wont buy the shares, then thats more for me !!!

I wouldn't buy shares of any airline this year. There a way too much risks for me (oil price, terror...).

Quoting Andaman (Reply 18):
I really hope they will fly in June still...

They will be around for some years to come. Hey they are doing an IPO in May, so they won't go bankrupt in June. And I want to fly to Helsinki in June...

pelican
 
semsem
Posts: 1621
Joined: Fri Jul 29, 2005 1:06 am

RE: Air Berlin In Bad Financial Shape?

Thu Apr 13, 2006 11:26 pm

Pelican I agree, but some airline shares since 1 year ago have doubled and even quadrupled.
 
andaman
Posts: 2271
Joined: Wed Oct 05, 2005 5:29 am

RE: Air Berlin In Bad Financial Shape?

Fri Apr 14, 2006 3:18 am

Quoting TriStar500 (Reply 21):

Get real please. Just because they are showing some negative (but not catastrophic) figures at the moment, they are not going belly up anytime soon. Enjoy your flight and experience some excellent value for money on your first AB trip!

Obviosly no panic  Smile
I have just been not so lucky with LLCs, two of those (V-Bird and FlyingFinn) disappeared after I made the bookings... I have the magic touch  stirthepot 
Chinese cookie in SFO: "You're doomed to a life of forever travelling abroad and to be able to afford it!"
 
Flyawa
Posts: 161
Joined: Thu Feb 03, 2000 2:07 pm

RE: Air Berlin In Bad Financial Shape?

Fri Apr 14, 2006 3:49 am

I saw two of AirBerlin's A320s on April 10th, in for maintenance overhauls at CWF Chennault International-Lake Charles EADS Aeroframe Services - Airbus MRO.
Better than most, not as good as some.
 
TIA
Posts: 465
Joined: Mon Mar 13, 2006 3:42 am

RE: Air Berlin In Bad Financial Shape?

Fri Apr 14, 2006 3:57 am

Quoting 7LBAC111 (Reply 10):
Quoting RJ100 (Reply 7):
And I believe future shareholders do not care about differences between operational losses and losses due to "one time costs". A loss is a loss and AB's results are very disappointing in my opinion.

I disagree. I think any serious potential investor will look at long term performance and future predictions before investing, rather than saying no to a 'one-off' such as this.

HEAR, HEAR.
 
User avatar
jorge1812
Posts: 2914
Joined: Mon Apr 19, 2004 9:11 pm

RE: Air Berlin In Bad Financial Shape?

Fri Apr 14, 2006 6:40 am

Quoting Pelican (Reply 12):

Quoting Sabena332 (Reply 11):
ad news but no problem, I will simply cut the salaries of my employees.

No, that's not the way Mr. Hunold is doing business. He would just extend the average working time and threaten everybody who thinks about getting ill.

Right. And this might just the beginning. Well, maybe the JBK was too expensive....sorry couldn't resist.

Georg

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