Air Berlin


Air Berlin plc & Co. Luftverkehrs KG, branded as airberlin or airberlin.com, was a major German airline. At its peak, it was Germany's second-largest airline after Lufthansa, as well as Europe's tenth-largest airline in terms of passengers carried. It was headquartered in Berlin and had hubs at Berlin Tegel Airport and Düsseldorf Airport. At the time of its insolvency, it was a member of the Oneworld airline alliance, having joined in 2012.
The airline was originally founded by American interests in 1978 to provide airline service to West Berlin, a territory that could not legally be served by West German airlines such as Lufthansa due to political restrictions on East German airspace. In 1991, shortly after German reunification, Air Berlin became a German-owned company and shifted its core business to compete more directly with Lufthansa, eventually becoming one of Germany's biggest airlines. After years of losses, however, Air Berlin filed for insolvency in August 2017 and ceased operations two months later.

History

1978–1990: American charter airline in West Berlin

Originally registered as Air Berlin USA, the company was founded in 1978 as a wholly owned subsidiary of Lelco, an American agricultural enterprise headquartered in Oregon, to operate charter flights on behalf of German tour operators from Berlin Tegel Airport, mostly to Mediterranean holiday resorts.
The co-founders of Air Berlin USA were:
Lelco was the agriculture business of Kim Lundgren's family in the United States.
As a United States airline, Air Berlin was able to access the West Berlin airline market. During the Cold War, Berlin's special political status meant that the air corridors into and out of Tegel Airport could only be used by airlines registered in France, the United Kingdom or the United States. The airline's headquarters were initially at Tegel Airport. Leonard Lundgren was the first chairman.
After the company was issued an airline licence and acquired two Boeing 707 jet airliners previously owned by Trans World Airlines, Air Berlin USA commenced revenue services on 28 April 1979 with a flight from Berlin-Tegel to Palma de Mallorca. Plans were made to start long-haul flights on West Berlin-Brussels-Florida routes, in cooperation with Air Florida.
In 1980, two Boeing 737-200s were leased from Air Florida. In 1981, Air Berlin USA continued its weekly scheduled Boeing 707 service on the Berlin Tegel Airport - Brussels - Orlando route; however, by 1982, the 707s had been phased out, and during most of the 1980s, Air Berlin USA operated only a single 737-200 or a 737-300. In 1990 and 1991, two Boeing 737-400s were also placed into service.

1990–2000: New investors and expansion

led to significant changes to the European aviation market, and in particular in Berlin: German airlines now gained access to the city. In 1991, Air Berlin was restructured as Air Berlin GmbH & Co. Luftverkehrs KG, a German-registered company, with several German investors joining Kim Lundgren, the original founder, thereby bringing the ownership in line with German foreign-control requirements. Joachim Hunold, a former sales and marketing director with LTU International, now led the company.
Following an order for ten Boeing 737-800s, Air Berlin grew and by 1999, the fleet grew to twelve aircraft. In 2001, Air Berlin and Hapag-Lloyd Flug became the first airlines in the world to have their Boeing 737-800s fitted with blended winglets, wingtip devices that are intended to improve fuel efficiency.
Air Berlin introduced scheduled flights in 1997, initially linking a number of secondary German airports to Mallorca. By 2002, 35 percent of Air Berlin's tickets were sold directly. In the same year, the airline expanded beyond holiday destinations as low-fare flights marketed as "City Shuttle" to London, Barcelona, Milan and Vienna started. Besides Berlin-Tegel, these routes were opened at six German airports that until then had not been served by one of the rising European low-cost carriers. In what later became a hallmark for Air Berlin as a "semi-low cost carrier", the airline offered complimentary meals and seat reservations, in contrast to its competitors Buzz, Hapag-Lloyd Express, Ryanair and Virgin Express.

2000–2006: Becoming Germany's second-largest airline

In November 2001, the delivery flight of a Boeing 737-800 fitted with winglets set a record: the aircraft with the registration code D-ABBC flew 8,345 kilometres non-stop from Seattle, USA to Berlin, Germany in 9 hours, 10 minutes.
In January 2004, Air Berlin announced it would cooperate with Niki, a Vienna-based airline. As part of the deal, Air Berlin took a 24% stake in Niki.
In 2005, the Group reorganised its corporate structure. It established Air Berlin plc into which it reversed Air Berlin GmbH & Co. Luftverkehrs KG and subsidiaries. It was suggested that the reason for the group to establish a UK-based PLC instead of a German-based AG was to avoid the need to have a supervisory board and employee representation as required by the German law of Mitbestimmung or co-determination.
In 2006, Air Berlin went public on the Frankfurt Stock Exchange. Originally scheduled for 5 May 2006, the IPO was postponed to 11 May 2006. The company said the delay was due to rises in fuel costs and other market pressures limiting investor demand. It reduced the initial share-price range from 15.0 to 17.5 euros to 11.5–14.5 euros. The stock opened at €12.0, selling a total of 42.5 million shares. Of these, 19.6 million were new shares increasing capital in the company, and the remainder to repay loans extended by the original shareholders and invested in the company earlier in 2006. After the IPO, the company claimed to have over 400 million euros in cash to fund further expansion, including aircraft purchases.
In August 2006, Air Berlin acquired German domestic airline dba. Flight operations at dba were continued as a fully owned subsidiary of Air Berlin until 14 November 2008, when the dba brand was discontinued due to staff strikes.
On 28 November 2006, Air Berlin ordered 60 Boeing 737-800 aircraft, and 15 smaller Boeing 737-700 aircraft. The value of the 75 aircraft was 5.1 billion US dollars Delivery of the aircraft started in 2007. All of these aircraft were equipped with blended winglets, to improve fuel efficiency.

2007–2012: Takeovers, expansion and new alliances

In March 2007, Air Berlin took over German leisure airline LTU, gaining access to the long-haul market and becoming the fourth-largest airline group in Europe in terms of passenger traffic. This deal led to the introduction of Airbus A321 and Airbus A330 aircraft into Air Berlin's fleet. On 1 May 2009, the LTU brand was discontinued.
On 7 July 2007, Air Berlin announced an order for 25 Boeing 787-8 Dreamliner long-haul aircraft, with further options and purchase rights. Three additional aircraft of this type were to be leased from International Lease Finance Corporation.
On 21 August 2007, Air Berlin acquired a 49 percent shareholding in Swiss charter airline Belair, the remainder being owned by tour operator Hotelplan. Following the deal, Belair's long-haul business was terminated, and the fleet was replaced by Airbus A320 family aircraft operating scheduled flights on behalf of Air Berlin as well as charter flights for Hotelplan. On 20 September 2007, Air Berlin announced it intended to buy its competitor Condor in a deal that envisaged Condor's owner, Thomas Cook Group, taking a 30% stake in Air Berlin. However, the rapidly increasing price of jet fuel and other considerations led to the abandonment of the deal in July 2008.
In January 2008 Air Berlin introduced a new logo and corporate design. The logo is a white oval shape on a red background where the letter "a" is a white circle and two white stylised wings. The text "Air Berlin" was in lower case and written as one word. Sometimes the slogan "Your Airline" was featured as part of the logo. In June 2008, CEO Joachim Hunold offended Catalan language speakers, when he claimed in an article included in Air Berlin's in-flight magazine that the government of the Balearic Islands was trying to impose the use of Catalan on Air Berlin flights from and to Majorca. He claimed that Air Berlin was an international airline and was not obliged to use Catalan. Hunold went on to criticise the language policy in Catalonia and the Balearic Islands, claiming that at the time many children could not speak any Spanish. The Balearic Islands' president, Francesc Antich, explained that his government had simply sent a letter to encourage airlines operating in the Balearic Islands to include Catalan among the languages used for onboard announcements.
On 18 June of the same year, Air Berlin announced that it would reduce its long-haul services by 13 percent and its domestic services by 10 percent to increase profitability. In September 2008, Air Berlin confirmed merger talks with competitor TUIfly, but added it was speaking with all parties. Air Berlin had, until 2007, been flying many code-share TUI flights. At the end of March 2009, Air Berlin PLC and TUI Travel PLC signed a deal by which their German flight businesses were to operate a long-term strategic alliance. Originally, each company was to take a 19.9% stake in the other and the German cartel authorities were petitioned for approval. After the Bundeskartellamt expressed concerns, the cross-ownership plan was not implemented. Instead, TUI Travel PLC purchased a 9.9% stake in Air Berlin PLC using a capital increase at a subsidiary to do so.
At the end of March 2009, a strategic partnership agreement with TUI Travel was signed, with Air Berlin and its competitor TUIfly purchasing 19.9 percent of the other's shares. Following the deal, Air Berlin took over all German domestic TUIfly routes, as well as those to Italy, Croatia and Austria. Also, all of Tuifly's Boeing 737-700 aircraft were added to Air Berlin's fleet. TUIfly was to abandon all scheduled flights and rely exclusively on the charter business.
In March 2009, ESAS Holding A.S., a Turkish company, bought approximately 15 per cent of the voting shares in Air Berlin. Also in 2009, Air Berlin added Hartmut Mehdorn to the board of directors after his retirement at Deutsche Bahn.
CompanyInterest
airberlin technik GmbH100 %
airberlin Holidays GmbH49 %
Belair100 %
Niki100 %

In April 2010 Air Berlin expanded its codeshare arrangements with Russia's S7 Airlines. Air Berlin and S7 Airlines had cooperated since October 2008. New services included codeshare flights via Moscow to Irkutsk, Perm and Rostov.
In July 2010, Air Berlin announced an increase in its shareholding in the Austrian airline Niki. Air Berlin indirectly acquired 25.9% of the shares in Niki from Privatstiftung Lauda and in doing so increased its shareholding in Niki from 24% to 49.9%. In connection with the increase of its shareholding, Air Berlin was to grant the private Lauda foundation a 40.5 million-euro loan. The private foundation had the options to repay the loan in three years with cash or through the transfer of the remaining 50.1% of Niki's shares.
File:AirBerlin Oneworld 737 landing at Düsseldorf.JPG|thumb|right|After becoming a member of Oneworld, several Air Berlin aircraft displayed the alliance's logo, as seen on this Boeing 737-800.
In July 2010, it was also announced that Air Berlin would join Oneworld, the global airline alliance. In preparation for joining the alliance, Air Berlin made codeshare agreements with Finnair and American Airlines starting with the 2010/2011 winter schedule. Air Berlin planned to operate an airline hub at Berlin Brandenburg Airport together with its Oneworld partners from the originally planned opening in 2012. The delayed opening of the new airport made it difficult to operate a hub, as the infrastructure at Tegel was not designed for a hub.
Air Berlin founded Follow Me Entertainment GmbH in September 2010 as a joint venture with kick-media ag. This joint-venture company markets image and sound media, books, games as well as events, concerts, tournaments and sponsoring.
On 1 April 2011 Air Berlin completed the integration of LTU. All Air Berlin Group technical services were consolidated in a new company called airberlin technik GmbH. It also added new routes, more frequent flights and additional long-haul flights from Düsseldorf. On 15 June 2011, Air Berlin and British Airways reached a codeshare agreement covering some flights within Europe, starting from 5 July 2011. The agreement applied to flights to over 40 European destinations served by the two airlines. CEO Joachim Hunold resigned from his position on 1 September 2011 and was succeeded by the former CEO of Deutsche Bahn AG, Hartmut Mehdorn, who led the company on an interim basis until January 2013.
In November 2011 Air Berlin and Pegasus Airlines launched Air Berlin Turkey, aiming at the charter market between Germany and Turkey. Pegasus Airlines is 16.5% owned by ESAS Holding AS. The new airline was absorbed into Pegasus Airlines on 31 March 2013. In the third quarter of 2011, the turnover of the company amounted to 1.4 billion euros, an increase of 11%. However, operating profit decreased by almost 50% to around 97 million euros. As a result, a new bond to raise additional capital was issued. In November 2011 Air Berlin took over the remaining 50.1% stake in NIKI as repayment of a loan and became its sole owner. The brand name was retained and Niki Lauda was given a position on the board of Air Berlin.
Air Berlin announced on 19 December 2011 that Etihad Airways had increased its share of Air Berlin from 2.99% to 29.1%, for a sum of 73 million euros, making Etihad the company's largest shareholder. The deal supplied more cash to Air Berlin, and provided Etihad access to Air Berlin's European network.