TravelNews: airberlin emerging from the crisis?

Airberlin started a major restructuring this year, focusing on becoming a network airline for Europe and transatlantic traffic, wet leasing a number of planes to Lufthansa and spinning of leisure flights to subsidiary Nikki Air (I reported about it here and here). And that reorganization did not go smoothly: with the introduction of the summer flight plan, chaos broke out at Airberlin, with endless delays and cancellations. 

In the last three months, Airberlin had to cancel more than 1,500 flights. The worst day was June 1st, with 47 flights cancelled or delayed by more than 3 hours. Given the EU regulations protecting passengers, the compensation for these delays is in the millions and growing, coming at a bad time for the financially struggling airline. 

With extensive media coverage in Germany and Europe of the delays as well as the financial problems, the failure of the merger of TUIfly and Nikki and the rumors around Etihad wanting to get rid of their 29% shares, Airberlin had to address the issues, as all of the news was undermining the trust in the airline and people’s willingness to book new tickets!
In a lengthy letter to customers, Airberlin blames their Partners Walter (who is operating short-haul routes with Q400 turboprop planes) and ground service AeroGround for much of the problems, and is insisting that they have initiated improvements to get the problems under control. Airberlin is also adding 700 flight attendants and sending 150 administrative staff to the front to stabilize operations. See all the details below:

Competitors and analysts were quick to point out that much of the problems were self-inflicted injuries, caused by insisting on too full a flight plan in the busy summer season, when there is little extra capacity, and any problem can cause ripple effects. 

I know from my long business experience that any corporate restructuring of this scale is bound to be difficult and it looks like Airberlin underestimated the challenge. Their tight financial situation doesn’t leave them much choice, they have to fight through the challenges and continue the restructuring. While their finances are safe through the next few months and I wouldn’t expect them to go out of business anytime soon, I do expect it to be a bumpy journey. If you have tickets for flights (I do in November), I’d recommend to watch your flights closely for any changes. While their might be changes, I’d expect Airberlin to honor the tickets and re-accommodate passengers in case of changes or cancellations. Airberlin is continuing to do aggressive sales, both for cash and reward bookings, and I would take advantage of them for last-minute leisure flights.
Airberlin is in a tough spot, with strong competition from Lufthansa in their targeted network segment as well as from Ryan Air and Eurowings in the low-cost segment. It’s unclear how Airberlin can solve their financial problems and emerge as a stronger airline. Given the ongoing operational and financial challenges, I would hesitate to book any trips that require me to arrive on time or that are several months out. My current booking used up most of my remaining airberlin topbonus miles and I wouldn’t recommend buying miles other than for immediate use. 

It’s sad to see another airline in trouble and I hope Airberlin can get through this. I will keep you posted on the developments.
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