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Etihad snaps up majority of Air Berlin programme
The deal is to be completed by the end of the month and proceeds from it will be included in Air Berlin's 2012 results.
December 18, 2012 11:19 by Reuters
Gulf carrier Etihad is buying a 70 percent stake in Air Berlin’s frequent-flyer programme as the German airline seeks to cut costs and pay down debt.
Germany’s No.2 airline after Lufthansa, which has not made an operating profit since 2007, said on Tuesday the deal to carve out the ‘topbonus’ programme would generate revenue of 184.4 million euros ($242.70 million).
The move comes a year after Abu Dhabi-based Etihad bought about 29 percent of Air Berlin and agreed to grant the loss-making German carrier up to $255 million in loans.
Under Tuesday’s agreement, Air Berlin will keep 30 percent of the ‘topbonus’ programme and will have the right to repurchase 10 percent from Etihad later on.
The deal is to be completed by the end of the month and proceeds from it will be included in Air Berlin’s 2012 results.
Air Berlin is struggling to recover after racking up debt in a few years of rapid expansion and is due to announce details of a new savings programme – dubbed Turbine 2013 – by the end of the month.